GBP/USD Attempts To Settle Back Above 1.3365

Key Insights

• Dollar strengthens amid new sanctions against Russia
• British pound recoups some of the early losses
• Geopolitical developments and sanctions on Russia will remain the key drivers for markets

British Pound Moves Lower Against U.S. Dollar

GBP/USD is currently trying to settle back above 1.3365, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index rallied after the Western countries decided to impose sanctions on Russia’s Central Bank in order to put pressure on the Russian ruble. Currently, the U.S. Dollar Index is trying to settle above the resistance at 97.25. In case this attempt is successful, the U.S. Dollar Index will move towards the next resistance at 97.45, which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the developments in Ukraine and on Russia’s reaction to Western sanctions. Russia has already decided to temporarily halt the sales of financial securities by non-residents as a response to the Western sanctions on Russia’s Central Bank.

The situation remains extremely tense, which supports safe-haven assets like the U.S. dollar. In case the situation continues to deteriorate and today’s negotiations between Russia and Ukraine yield no positive results, the U.S. dollar will get more support.

Technical Analysis

GBP/USD has recently managed to settle back above 1.3335 and is trying to settle above the next resistance level at 1.3365. In case this attempt is successful, GBP/USD will move towards the resistance at 1.3390.

If GBP/USD gets above 1.3390, it will head towards the resistance level at 1.3420. A move above this level will open the way to the test of the resistance at 1.3450. A successful test of the resistance at 1.3450 will push GBP/USD towards the resistance at 1.3465.

On the support side, a move below 1.3365 will push GBP/USD back towards the support at 1.3335. If GBP/USD declines below this level, it will head towards the next support at 1.3315. A move below 1.3315 will open the way to the test of the support at 1.3285.

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