U.S. Dollar Tries To Gain More Ground Against British Pound
GBP/USD continues its attempts to settle below the support at 1.4100 while the U.S. dollar is gaining some ground against a broad basket of currencies.
The U.S. Dollar Index is currently testing the resistance at the 50 EMA at 90.60. In case this test is successful, the U.S. Dollar Index will move towards the resistance at 90.90 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 and the dynamics of U.S. government bond markets.
Treasury yields are currently located near multi-month lows, but they try to gain some upside momentum. If Treasury yields manage to move higher, U.S. dollar may get more support.
It should be noted that markets have ignored inflation fears in recent trading sessions despite worrisome inflation data from the U.S. However, the situation may change quickly if traders decide that inflation is rising fast. This scenario will likely be bullish for the American currency.
GBP/USD is currently trying to settle below the nearest support level at 1.4100. In case this attempt is successful, GBP/USD will move towards the next support which is located at 1.4080.
A move below this level will present a serious problem for GBP/USD bulls as it will indicate that GBP/USD is ready to get out of the current trading range and develop additional downside momentum.
If GBP/USD declines below the support at 1.4080, it will head towards the next support at the 50 EMA at 1.4065. A successful test of this level will open the way to the test of the support at 1.4050.
On the upside, the nearest resistance level for GBP/USD is located at the 20 EMA at 1.4130. If GBP/USD gets above the 20 EMA, it will move towards the next resistance at 1.4150. A move above this level will push GBP/USD towards the resistance at 1.4180.
For a look at all of today’s economic events, check out our economic calendar.