GBP/USD Daily Forecast – U.S. Dollar Declines Ahead Of Fed Interest Rate Decision.

British Pound Moves Higher Against U.S. Dollar..GBD/USD is currently trying to settle above the resistance at 1.3230 while U.S. dollar is losing some ground against a broad basket of currencies.The U.S. Dollar Index has recently made another attempt to settle above the resistance at 96.50 but failed to develop sufficient upside momentum. If the U.S. Dollar Index settles below 96.50, it will move towards the support level at 96.25 which will be bullish for GBP/USD.

Today, foreign exchange market traders will take a look at the latest inflation data from UK. Analysts expect that Inflation Rate increased by 0.4% month-over-month in November after growing by 1.1% in October. On a year-over-year basis, Inflation Rate is projected to grow by 4.7%. Core Inflation Rate is expected to increase by 3.7%.

The main event of the day for traders is the Fed Interest Rate Decision and the subsequent commentary. Analysts expect that the Fed will decide to cut its asset purchase program at a faster pace, and the key question is whether Fed will commit to more aggressive rate hikes after it QE program is completed.

Analysis.

GBP/USD is currently testing the resistance level at 1.3230. In case GBP/USD manages to settle back above this level, it will get to the test of the resistance at 1.3250.A move above 1.3250 will push GBP/USD towards the resistance level which is located at 1.3280. The 20 EMA is located at 1.3290, so GBP/USD may face significant resistance in the 1.3280 – 1.3290 area. A move above this resistance area will open the way to the test of the resistance at 1.3310.On the support side, the nearest support level for GBP/USD is located at 1.3200. In case GBP/USD gets back below the support at 1.3200, it will head towards the next support level which is located near December lows at 1.3170. A move below 1.3170 will push GBP/USD towards the support at 1.3140., 

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