GBP/USD Daily Forecast – British Pound Tries To Rebound After Serious Sell-Off

British Pound Gains Some Ground Against U.S. Dollar

GBP/USD is currently trying to settle back above 1.3550 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the resistance level which is located near yearly highs at 93.75. In case the U.S. Dollar Index gets above this level, it will move towards the next resistance at 93.90 which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at Pending Home Sales report from U.S. Analysts expect that Pending Home Sales increased by 1.4% month-over-month in August after declining by 1.8% in July.

Traders will also continue to monitor the developments in U.S. government bond markets. The yield of 10-year Treasuries has recently made an attempt to settle above 1.56% but lost momentum and pulled back to 1.52%. If the yield of 10-year Treasuries gets back to the 1.56% level, U.S. dollar may get more support.

Technical Analysis

GBP/USD is currently trying to get above the nearest resistance level which is located at 1.3550. In case GBP/USD manages to settle above 1.3550, it will head towards the next resistance at 1.3575.

A successful test of the resistance at 1.3575 will open the way to the test of the resistance at 1.3600. If GBP/USD gets above this level, it will head towards the next resistance at 1.3635.

On the support side, GBP/USD needs to settle below 1.3550 to have a chance to gain additional downside momentum in the near term. RSI is close to the oversold territory after the recent sell-off, but there is enough room to gain additional downside momentum in case the right catalysts emerge.

If GBP/USD settles below 1.3550, it will move towards recent lows at 1.3520. A move below this level will open the way to the test of the next support at 1.3490. In case GBP/USD gets below 1.3490, it will head towards the support at 1.3450.

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