GBP/USD Daily Forecast – British Pound Stabilizes After Yesterday’s Sell-Off

British Pound Is Losing Some Ground Against The U.S. Dollar

GBP/USD continues its attempts to settle below 1.3500 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index settled in the range between the support at 94.20 and the resistance at 94.50. In case the U.S. Dollar Index gets above the resistance at 94.50, it will gain additional upside momentum and head towards the next resistance at 94.75 which will be bearish for GBP/USD.

Yesterday, the Bank of England left the interest rate unchanged, while many foreign exchange market traders believed that BoE would be the first big bank to raise rates during the coronavirus pandemic. This decision put significant pressure on the British pound and pushed GBP/USD from 1.3700 to 1.3500.

Today, traders will focus on U.S. Non Farm Payrolls report. The report is expected to show that the U.S. economy added 450,000 jobs in October after adding 194,000 jobs in September.

Technical Analysis

GBP/USD is currently trying to settle below the support level at 1.3500. RSI remains in the moderate territory despite the strong sell-off, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

In case GBP/USD manages to settle below 1.3500, it will head towards the next support level which is located at the recent lows at 1.3470. A successful test of this support level will open the way to the test of the next support at 1.3435. If GBP/USD declines below 1.3435, it will head towards the next support at 1.3415.

On the upside, a move above 1.3500 will push GBP/USD towards the resistance level at 1.3535. If GBP/USD gets above the resistance at 1.3535, it will head towards the next resistance at 1.3575. A successful test of the resistance level at 1.3575 will open the way to the test of the next resistance level which is located at 1.3600.

For a look at all of today’s economic events, check out our economic calendar.