GBP/USD lacks momentum and continues to trade near the 20 EMA.
GBP/USD Video 09.06.21.
GBP/USD continues to trade near the support level at 1.4150 while the U.S. dollar is mostly flat against a broad basket of currencies.
The U.S. Dollar Index is stuck in the range between the support at 90 and the resistance at the 20 EMA at 90.20. In case the U.S. Dollar Index declines below the support at 90, it will gain downside momentum and move towards the next support level at 89.75 which will be bullish for GBP/USD.
There are no big moves in the foreign exchange market as traders wait for U.S. inflation data which will be released on Thursday. At this point, it looks that traders are not ready to make any significant moves ahead of this data.
The key question is whether U.S. inflation managed to get above the 5% level in May. The bond market believes that inflation is under control, and the yield of 10-year Treasuries is currently trying to settle below 1.53%. If this attempt is successful, it will gain additional downside momentum and head towards 1.50% which will be bearish for the U.S. dollar. However, it should be noted that Treasury yield dynamics will depend on the U.S. inflation data so the situation may change quickly.
GBP/USD received support near the 20 EMA at 1.4140 and is trying to settle back above the resistance at 1.4150. In case this attempt is successful, it will get to another test of the next resistance level at 1.4180.
A move above this level will open the way to the test of the resistance at 1.4200. In case GBP/USD settles above 1.4200, it will head towards the next resistance at 1.4240.
On the support side, GBP/USD needs to settle below the 20 EMA at 1.4140 to have a chance to develop downside momentum in the near term. The next support level for GBP/USD is located at 1.4100. If GBP/USD declines below this level, it will head towards the support at 1.4080.
For a look at all of today’s economic events, check out our economic calendar.
Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.