U.S. Dollar Gains More Ground Against British Pound

GBP/USD is currently trying to settle below the support level at 1.3670 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to get above the 93 level. If the U.S. Dollar Index manages to settle above this level, it will get to the test of the resistance at 93.10 which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at Housing Starts and Building Permits reports from U.S. Analysts expect that Housing Starts grew by 0.8% month-over-month in June. Bulding Permits are projected to grow by 0.5%.

Traders will also keep an eye on the latest developments on the coronavirus front as worries about the spread of the Delta variant of COVID-19 were the main driver behind the recent rally of the U.S. dollar.

If the situation continues to get worse and traders begin to price in the risks of additional lockdowns, safe-haven assets like U.S. dollar will get a boost.

Technical Analysis

GBP/USD managed to settle below the support at 1.3710 and is trying to settle below the next support level at 1.3670. In case this attempt is successful, GBP/USD will move towards the next support level which is located at 1.3635. RSI is close to the oversold territory but there is enough room to gain additional downside momentum in case the right catalysts emerge.

A move below the support at 1.3635 will open the way to the test of the support at 1.3610. If GBP/USD declines below this level, it will head towards the next support at 1.3575.

On the upside, previous support level at 1.3710 will serve as the first resistance level for GBP/USD. A successful test of this level will push GBP/USD towards the resistance at 1.3745. In case GBP/USD manages to settle above 1.3745, it will head towards the next resistance at 1.3780.

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

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This article was originally posted on FX Empire


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