British Pound Attempts To Gain More Ground Against U.S. Dollar

GBP/USD is currently trying to get to the test of the resistance at 1.3980 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance level at 91.80 but failed to develop sufficient upside momentum and pulled back. If the U.S. Dollar Index manages to settle above 91.80, it will move towards the resistance at 92 which will be bearish for GBP/USD.

Yesterday, UK reported that Manufacturing PMI declined from 65.6 in May to 64.2 in June compared to analyst consensus of 64. Services PMI decreased from 62.9 to 61.7 while analysts expected that it would grow to 63.

In the U.S., Manufacturing PMI increased from 62.1 in May to 62.6 in June compared to analyst consensus of 61.5. Services PMI declined from 70.4 to 64.8 compared to analyst consensus of 70.

Today, foreign exchange market traders will focus on the Bank of England Interest Rate Decision. Analysts expect that BoE will leave the interest rate unchanged at 0.1%. The quantitative easing program is also expected to remain unchanged at 875 billion pounds. The market will focus on the Bank’s commentary which may have a material impact on GBP/USD dynamics.

Technical Analysis

GBP/USD managed to get above 1.3950 and is trying to get to the test of the next resistance level at 1.3980. In case GBP/USD settles above this level, it will head towards the resistance at 1.4000.

A successful test of this level will push GBP/USD towards the resistance at the 20 EMA at 1.4015. A move above the 20 EMA will lead to the test of the next resistance level which is located at the 50 EMA at 1.4025.

On the support side, GBP/USD needs to settle below 1.3950 to have a chance to develop downside momentum in the near term. The next support level is located at 1.3920.

If GBP/USD declines below 1.3920, it will head towards the support at 1.3900. A successful test of this level will open the way to the test of the next support at 1.3865.

Story continues

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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