GBP/USD Daily Forecast – U.S. Dollar Pulls Back After Rally

British Pound Tries To Rebound Against U.S. Dollar

GBP/USD is currently trying to get back above 1.3450 while the U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index has pulled back a bit after yesterday’s strong rally. The nearest support level for the U.S. Dollar Index is located at 94.20. In case the U.S. Dollar Index declines below this level, it will move towards the 94 level which will be bullish for GBP/USD.

UK has recently released the final reading of the second-quarter GDP Growth Rate report. The report indicated that GDP increased by 5.5% quarter-over-quarter compared to analyst consensus which called for growth of 4.8%. On a year-over-year basis, GDp grew by 23.6% compared to analyst consensus of 22.2%.

Foreign exchange market traders also had a chance to take a look at UK Nationwide Housing Prices report for September. The report indicated that housing prices increased by 0.1% month-over-month compared to analyst consensus which called for growth of 0.6%.

Technical Analysis

GBP/USD received support near 1.3410 and is trying to settle above the resistance at 1.3450. RSI is in the oversold territory after the recent sell-off, and there is plenty of room to gain upside momentum in case the right catalysts emerge.

In case GBP/USD manages to settle above 1.3450, it will head towards the next resistance at 1.3490. A successful test of the resistance at 1.3490 will open the way to the test of the next resistance level which is located at 1.3520. If GBP/USD moves above this level, it will head towards the resistance at 1.3550.

On the support side, the nearest support level for GBP/USD is located near the recent lows at 1.3410. In case GBP/USD manages to settle below this level, it will continue its downside move and head towards the support at 1.3390. A move below the support level at 1.3390 will open the way to the test of the next support level at 1.3370.

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