U.S. Dollar Is Losing Ground Against British Pound
GBP/USD is currently trying to get back above 1.3665 while U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index has recently made an attempt to settle above the resistance at 93.40 but failed to develop sufficient upside momentum and pulled back. The nearest support level for the U.S. Dollar Index is located at 93.10. In case the U.S. Dollar Index gets to the test of this level, GBP/USD will get more support.
Yesterday, the Fed left the interest rate unchanged and signaled that it may announce the reduction of the asset purchase program at the next meeting. Importantly, the Federal funds rate projection for 2022 was changed from 0.1% to 0.3%, which means that Fed may be ready to start raising rates in the next year. While the Fed was more hawkish than expected, the U.S. dollar failed to gain significant upside momentum, and it looks that resistance near yearly highs remains strong.
Today, foreign exchange market traders will have a chance to take a look at the flash readings of PMI reports from UK. Analysts expect that Manufacturing PMI declined from 60.3 in August to 59 in September while Services PMI remained unchanged at 55.
GBP/USD managed to get above the resistance at 1.3635 and is moving towards the next resistance level at 1.3665. In case GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3690.
A successful test of the resistance at 1.3690 will open the way to the test of the next resistance level at 1.3710. In case GBP/USD settles above 1.3710, it will move towards the resistance which is located at the 20 EMA at 1.3745.
On the support side, GBP/USD needs to settle back below 1.3635 to have a chance to develop additional downside momentum in the near term. The next support level is located at 1.3600. If GBP/USD declines below this level, it will move towards the support at 1.3575.
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