GBP/USD Daily Forecast – Test Of Resistance At 1.3000

06 Oct 2020, 16:21 · Views 430

British Pound Continues To Gain Ground Against The U.S. Dollar

GBP/USD is testing the resistance at 1.3000 as the U.S. dollar remains under pressure against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below 93.50 and tries to continue its downside move. The nearest material support level for the U.S. Dollar Index is located at 93.10. In case the U.S. Dollar Index moves towards this level, GBP/USD will break above 1.3000 and gain additional upside momentum.

The American currency is under pressure as traders increased their purchases of riskier assets after U.S. President Donald Trump was discharged from hospital. Concerns about his health have recently led to increased support for safe haven assets, but this support has already evaporated since the President returned to the White House.

Yesterday, UK reported that Services PMI decreased from 58.8 in August to 56.1 in September compared to analyst consensus of 55.1. The market was worried that the recovery of the services segment would slow down due to continued problems on the coronavirus front in the UK, but the report indicated that businesses managed to find a way to mitigate the negative impact of the pandemic.

In the U.S., the services segment also continued to expand, and Services PMI stood at 54.3 in September.

Technical Analysis

GBP/USD is currently trying to settle above the nearest resistance level at 1.3000. If this attempt is successful, GBP/USD will gain upside momentum and head towards the next significant resistance level at 1.3110.

There are no major levels between 1.3000 and 1.3110 so this move may be fast. A successful test of the resistance at 1.3110 will open the way to the test of the next resistance level at 1.3170.

On the support side, the nearest support for GBP/USD is located at the 50 EMA at 1.2940. In case GBP/USD gets below the 50 EMA, it will continue its downside move and move towards the test of the next support level at the 20 EMA at 1.2915.

A move below the 20 EMA will signal that GBP/USD has lost its upside momentum and will try to establish a new downside trend. #GBP/USD##FX#

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