GBP/USD Daily Forecast – U.S. Dollar Gains Ground Ahead Of Fed Interest Rate Decision

GBP/USD Video 17.03.21.

British Pound Is Moving Lower Against U.S. Dollar

GBP/USD is currently trying to settle back below 1.3900 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index stays in the range between the support at 91.75 and the resistance at 92. Currently, the U.S. Dollar Index is trying to get to another test of the resistance at 92. In case the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 92.25 which will be bearish for GBP/USD.

Yesterday, U.S. reported that Retail Sales decreased by 3% month-over-month in February compared to analyst consensus which called for a decline of 0.5%. While the headline number was disappointing, the report did not have much impact on the market as January Retail Sales growth was revised from 5.3% to 7.6%.

Today, foreign exchange market traders will focus on the Fed Interest Rate Decision. Most likely, Fed Chair Jerome Powell will try to calm markets, but it remains to be seen whether he will be able to stop the sell-off in the U.S. government bond market which is pushing Treasury yields higher.

Tomorrow, the Bank of England will announce its interest rate decision so the second half of this week will be very busy for GBP/USD traders.

Technical Analysis

GBP/USD faced resistance at the 20 EMA at 1.3910 and declined below 1.3900. The nearest support level for GBP/USD is located at 1.3865.

In case GBP/USD manages to settle below this level, it will head towards the next support which is located near the 50 EMA at 1.3835. A move below the 50 EMA will push GBP/USD towards the support at 1.3800.

On the upside, the 20 EMA at 1.3910 is the nearest resistance level for GBP/USD. If GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3950.

A move above 1.3950 will open the way to the test of the resistance at 1.3980. If GBP/USD gets above this level, it will head towards the next resistance at 1.4000.

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