GBP/USD Daily Forecast – British Pound Tries To Rebound After Yesterday’s Sell-Off
GBP / USD video 10/7/20.
The US dollar is under pressure after yesterday's big step
GBP / USD is currently trying to stabilize again above 1.2900, while the US dollar is losing some ground against a broad basket of currencies after yesterday's uptrend.
The key theme for the forex market is Trump's decision to end business talks with Democrats. Traders were hoping for a new round of economic activity, but now the market will have to wait for the November elections before any new economic talks become possible.
Not surprisingly, traders were selling riskier assets on the news. Yesterday the S&P 500 was down 1.4% as the US dollar index climbed back above 93.50 in an attempt to gain more upside momentum.
Currently, the US dollar index is trying to hit the next resistance level at 93.85 at 50 EMA. If this attempt is successful, the US dollar index will head towards the next resistance level at 94.20, which will be bearish for GBP / USD.
In addition to the latest news on business activity talks, traders will be focusing on the FOMC minutes of the final meeting, which will be released later today. The market will be looking for additional clues about the Fed's view of the current economic situation and the timing of the possible rate hike.
GBP / USD received support near 1.2870 and tries to break back above 1.2900. The closest significant resistance level for GBP / USD is at 50 EMA at 1.2930.
If GBP / USD manages to break above this level, it will gain upside momentum and approach the test of the main resistance level at 1.3000.
Over the past few weeks, GBP / USD has made several attempts to settle above 1.3000, but those attempts have yielded no results. If GBP / USD moves above 1.3000 it is moving towards the nearest resistance at 1.3110.
On the support side, the next level of support has emerged at 1.2870. If GBP / USD breaks below this level, it will continue its downward movement and will test the next support level at 1.2815.
Movement below 1.2815 opens the way to test the next level of support at 1.2780.
In our economic calendar you will find all economic events of today.
This article was originally published on FX Empire
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