British Pound Moves Higher Against U.S. Dollar
GBP/USD is currently trying to settle above the resistance at 1.3780 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index has managed to get below the support level at 93.75 and is moving towards the next support which is located near the 50 EMA at 93.40. In case the U.S. Dollar index gets to the test of this level, GBP/USD will get more support.
Yesterday, U.S. reported that Industrial Production declined by 1.3% month-over-month in September while analysts expected that it would grow by 0.2%. This report put pressure on the American currency as it indicated that the economy may be slowing down. Thus, the Fed may decide to keep the current asset purchase program intact instead of reducing it in November, which is bearish for the U.S. dollar.
Today, foreign exchange market traders will have a chance to take a look at U.S. Building Permits and Housing Starts reports for September. Analysts expect that Housing Starts declined by 0.9% month-over-month while Building Permits decreased by 1.8%.
GBP/USD managed to settle above the resistance at 1.3745 and is trying to get above the next resistance level at 1.3780. RSI remains in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
If GBP/USD settles above the resistance at 1.3780, it will move towards the next resistance level which is located at 1.3800. A move above this level will open the way to the test of the resistance at 1.3835. In case GBP/USD gets above 1.3835, it will continue its rebound and head towards the resistance at 1.3875.
On the support side, the previous resistance at 1.3745 will serve as the first support level for GBP/USD. The next support level is located at 1.3710. If GBP/USD declines below this level, it will move towards the support level at 1.3690, although it may also get support at the 50 EMA at 1.3700.
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