British Pound Remains Under Pressure Against U.S. Dollar
GBP/USD is currently trying to settle below the support at 1.3610 while the U.S. dollar is moving higher against a broad basket of currencies.
The U.S. Dollar Index is currently testing the nearest resistance level at 93.10. In case this test is successful, the U.S. Dollar Index will move towards 93.30 which will be bearish for GBP/USD.
There are no important economic reports scheduled to be released in the U.S. and UK today so foreign exchange market traders will focus on general market sentiment, which is driven by concerns about the Delta variant of coronavirus.
Demand for safe-haven assets stays strong so U.S. dollar continues to gain ground against a broad basket of currencies while Treasury yields move lower. I’d note that stocks and commodities managed to gain some upside momentum after the recent sell-off which indicates that many traders remain bullish on markets despite virus worries. However, this upside move had no material impact on currency dynamics.
GBP/USD managed to settle below the support at 1.3635 and is trying to settle below the next support level at 1.3610. In case this attempt is successful, GBP/USD will get to another test of the support which is located at the recent lows at 1.3575.
A move below the support at 1.3575 will open the way to the test of the next support at 1.3535. If GBP/USD declines below this level, it will move towards the support at 1.3500.
On the upside, the previous support level at 1.3635 will serve as the first resistance level for GBP/USD. RSI has just entered into the oversold territory, so the risks of a rebound are increasing.
If GBP/USD settles above the resistance at 1.3635, it will head towards the next resistance at 1.3670. A successful test of the resistance at 1.3670 will push GBP/USD towards the resistance which is located at 1.3710.
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