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GBP/USD Tests Resistance At 1.3700

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·2 min read
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British Pound Attempts To Gain More Ground Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.3700 while U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle below the support level at 95. In case the U.S. Dollar Index declines below this level, it will move towards the support at 94.75 which will be bullish for GBP/USD.

Today, foreign exchange market traders will focus on the economic data from U.S. Analysts expect that Initial Jobless Claims report will indicate that 200,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to decline from 1.75 million to 1.73 million.

Traders will also take a look at Producer Prices report which is projected to show that Producer Prices increased by 0.4% month-over-month in December. On a year-over-year basis, Producer Prices are projected to grow by 8%. It remains to be seen whether Producer Prices data will have a material impact on currency dynamics or traders will stay focused on yesterday’s inflation data.

Technical Analysis

GBP/USD settled above the resistance level at 1.3665 and is trying to continue its upside move. Currently, it is testing the resistance at 1.3700. In case this test is successful, GBP/USD will move towards the next resistance level at 1.3735.

It should be noted that RSI is in the overbought territory, so the risks of a pullback are increasing. In case GBP/USD manages to get above 1.3735, it will head towards the resistance at 1.3765.

A successful test of the resistance at 1.3765 will push GBP/USD towards the resistance at 1.3800. If GBP/USD gets above this level, it will head towards the next resistance at 1.3830.

On the support side, the previous resistance at 1.3665 will serve as the first support level for GBP/USD. In case GBP/USD declines below 1.3665, it will head towards the next support level which is located at 1.3635. A successful test of this level will push GBP/USD towards the next support at 1.3600.

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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