GBP/USD Daily Forecast – U.S. Dollar Continues To Move Higher Against British Pound

GBP/USD Video 02.06.21.

U.S. Dollar Attempts To Gain More Ground Against British Pound

GBP/USD is currently trying to settle below the support at 1.4150 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is slowly moving towards the nearest resistance level at 90. If the U.S. Dollar Index manages to settle back above this level, it will head towards the 20 EMA at 90.20 which will be bearish for GBP/USD.

Yesterday, UK reported that Manufacturing PMI increased from 60.9 in April to 65.6 in May compared to analyst consensus of 66.1. In the U.S., Manufacturing PMI improved from 60.5 to 62.1 compared to analyst consensus of 61.5.

There are no important economic reports scheduled to be released in the U.S. and UK today so foreign exchange market traders will focus on general market sentiment and developments in U.S. government bond markets.

The yields of 10-year Treasuries have recently made an attempt to settle above the 20 EMA at 1.61% but failed to develop sufficient upside momentum and pulled back. The nearest significant support level is located at the 50 EMA at 1.58%. If 10-year Treasury yields get to the test of this level, the U.S. dollar may find itself under pressure.

Technical Analysis

GBP/USD managed to settle below the support at 1.4180 and is testing the next support level at 1.4150. In case this test is successful, GBP/USD will head towards the next support which is located at the 20 EMA at 1.4125.

A move below the 20 EMA will open the way to the test of the support at 1.4100. If GBP/USD declines below the support at 1.4100, it will head towards the next support at 1.4080.

On the upside, the previous support level at 1.4180 will serve as the first resistance level for GBP/USD. If GBP/USD gets above this level, it will head towards the next resistance at 1.4200. A successful test of this level will push GBP/USD towards the resistance at the recent highs at 1.4240.

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