GBP/USD Daily Forecast – Resistance At 1.3000 In Sight
GBP/USD Video 18.09.20.
British Pound Tries To Gain Additional Upside Momentum
GBP/USD continues its attempts to get above the nearest resistance level at the 50 EMA at 1.3000. The British pound is supported by a Financial Times report which stated that European Commision President Ursula Von der Leyen said that the trade deal with Britain was still possible.
A messy Brexit is the main threat for the pound right now so any positive news on this front provide support to the British currency.
Yesterday, the Bank of England announced its Interest Rate Decision. There were no major surprises as the bank kept the rate at 0.1% and also maintained its quantitative easing program at 745 billion pounds.
UK has just reported Retail Sales data for August. On a month-over-month basis, Retail Sales increased by 0.8% compared to analyst consensus which called for growth of 0.7%. On a year-over-year basis, Retail Sales grew by 2.8%.
The Retail Sales data highlighted the continued rebound of UK consumer activity which may provide additional support to GBP/USD.
GBP/USD will continue to be very sensitive to Brexit news over the next weeks but traders should also keep an eye on economic data from both U.S. and UK as markets start to worry that the economic recovery may be slowing down.
Technical Analysis
GBP/USD is currently trying to settle above the nearest resistance level at the 50 EMA at 1.3000.
If this attempt is successful, GBP/USD will head towards the next resistance level at the 20 EMA at 1.3020. A move above the 20 EMA will signal that GBP/USD is ready to return to its previous upside trend so GBP/USD will likely gain significant upside momentum.
In this case, it will head towards the next major resistance level at 1.3110.
On the support side, the nearest support for GBP/USD is located at 1.2925. If GBP/USD manages to settle below this support level, it will decline towards the next support at 1.2880.
A move below the support at 1.2880 will open the way to the test of the next support at 1.2815. I’d note that GBP/USD may quickly move between the support levels since recent trading action indicated that there were no strong levels between 1.2750 and 1.3000.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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