GBP/USD Video 05.03.21.
British Pound Remains Under Pressure
GBP/USD is currently trying to settle below the support at 1.3900 while the U.S. dollar continues to move higher against a broad basket of currencies.
Yesterday, the U.S. Dollar Index managed to get above the resistance at 91.50 as Treasury yields rallied. Today, Treasury yields remain close to multi-month highs, providing additional support to the American currency. The nearest resistance level for the U.S. dollar is located at 91.75. In case the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at the 92 level which will be bearish for GBP/USD.
Today, foreign exchange market traders will have a chance to take a look at U.S. employment reports. Non Farm Payrolls report is projected to show that the economy added 182,000 jobs in February. The recent ADP Employment Change report was worse than expected, and it remains to be seen whether employment gains were as significant as analysts project. Meanwhile, Unemployment Rate report is projected to show that Unemployment Rate remained unchanged at 6.3% in February.
GBP/USD gained downside momentum and is trying to settle below the support at 1.3900. RSI remains in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
If GBP/USD settles below 1.3900, it will head towards the next support level at 1.3865. From a big picture point of view, a move out of the 1.3900 – 1.4000 range will be a worrisome development for GBP/USD bulls.
A move below 1.3865 will push GBP/USD towards the support at 1.3835. In case GBP/USD declines below 1.3835, it will move towards the next support near the 50 EMA at 1.3800.
On the upside, the nearest resistance level for GBP/USD is located at the 20 EMA at 1.3920. If GBP/USD settles above this level, it will move towards the next resistance level at 1.3950. A successful test of the resistance at 1.3950 will push GBP/USD towards the next resistance at 1.3980.
For a look at all of today’s economic events, check out our economic calendar.