GBP/USD Daily Forecast – British Pound Gains Ground Ahead Of The Weekend

GBP / USD Video 10/9/20.
Britain publishes alarming economic reports
GBP / USD tries to stabilize above 1.2950 as the US dollar loses ground against a broad basket of currencies.
The US dollar index is currently trying to move below 93.50. If this attempt is successful, the US dollar index will head towards its recent lows at 93.35, which will be bullish for GBP / USD.
The UK has just published several economic reports. Output Manufacturing output fell 8.4% yoy in August, compared with analyst consensus calling for a 5.9% decline. Manufacturing output rose just 0.7% month-on-month, compared to an analyst consensus of 3%.
Industrial production was also worse than expected. In August industrial production declined 6.4% yoy, compared to an analyst consensus of -4.6%. Compared to the previous month, industrial production increased by 0.3%, while analysts expected growth of 2.5%.
Construction output declined 13% year-on-year, while analysts expected a decline of 8.8%.
These reports are very alarming as the pandemic continues to put significant pressure on the UK economy. Economic data for August is weak and we know the UK put new anti-virus measures in place in September and October, so any further recovery in the UK economy is currently in doubt.
It remains to be seen whether this data will put any pressure on the pound as traders focus on US economic talks and its possible impact on the general direction of the US dollar.
Technical analysis
GBP / USD continues its attempts to settle above 1.2950. If GBP / USD breaks this level it has a chance to pass the test of the main resistance at 1.3000.
If GBP / USD is above resistance at 1.3000, it will gain upside momentum and move to the next resistance level at 1.3110.
On the support page, the closest support for GBP / USD is at the 50 EMA at 1.2930. Additionally, GBP / USD could receive support at the 50 EMA around 1.2915.
If GBP / USD manages to move below the 50 EMA and 20 EMA, it will gain bearish momentum and head for the next significant support level at 1.2815.
From a bigger picture perspective, GBP / USD continues to rebound but is facing strong resistance at 1.3000. Movement above this resistance level will signal that GBP / USD will attempt to make a bigger move higher.
In our economic calendar you will find all economic events of today.
This article was originally published on FX Empire
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