British Pound gains ground against U.S. Dollar
GBP/USD is trying to settle back above 1.3600 while the U.S. dollar is losing some ground against a broad basket of currencies.
Yesterday, the U.S. Dollar Index made an attempt to settle above the resistance at the 50 EMA at 90.95 but failed to develop sufficient upside momentum and pulled back. Currently, the U.S. Dollar Index is trying to settle below the nearest support level at 90.70. If this attempt is successful, the U.S. Dollar Index will move towards the next support level at 90.50 which will be bullish for GBP/USD.
There are no important economic reports scheduled to be released today in the U.S. and UK so foreign exchange market traders will focus on general market sentiment and wait for any updates ahead of Joe Biden’s inauguration.
At this point, traders will try to evaluate the future foreign exchange policy of Biden’s administration. Biden’s Treasury Secretary nominee Janet Yellen is expected to state that the U.S. is not seeking a weaker dollar, but it remains to be seen whether an explicit commitment to market-set foreign exchange rates will have any significant impact on the dynamics of the American currency.
GBP/USD failed to settle below the 20 EMA at 1.3575 and is trying to settle back above 1.3600. RSI is in the moderate territory so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
The nearest resistance level for GBP/USD is located at 1.3625. If GBP/USD manages to get above this level, it will head towards the resistance at 1.3665. A move above the resistance at 1.3665 will push GBP/USD towards the next resistance level at 1.3710.
On the support side, the 20 EMA at 1.3575 will serve as the first material support level for GBP/USD. A move below the 20 EMA will push GBP/USD towards the support level at 1.3540. If GBP/USD declines below this support level, it will head towards the next support at 1.3500.
Source: yahoo finance