GBP/USD Gains Ground As Rebound Continues

Key Insights

• GBP/USD continues its attempts to develop upside momentum despite rising Treasury yields. 
• Today, traders will focus on the final readings of Services PMI reports from the UK and the U.S. 
• A move above 1.3140 will push GBP/USD towards the resistance at 1.3155.

British Pound Gains Some Ground Against U.S. Dollar

GBP/USD continues its attempts to settle above the resistance level at 1.3140, while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index is stuck near the resistance level at 99. If the U.S. Dollar Index manages to settle above 99, it will move towards the resistance at 99.20, which will be bearish for GBP/USD.

Today, foreign exchange market traders will take a look at the final reading of UK Services PMI report for March. Analysts expect that UK Services PMI increased from 60.5 in February to 61 in March. In the U.S., Services PMI is projected to grow from 56.5 to 58.9.

Traders will also keep an eye on the developments in U.S. government bond markets. Yesterday, the yield of 2-year Treasuries faced strong resistance near 2.50% and pulled back. Today, it is trying to settle back above the 2.45% level. In case this attempt is successful, the yield of 2-year Treasuries will move towards the 2.50% level, which will provide more support to the U.S. dollar.

Technical Analysis

GBP/USD is testing the resistance at 1.3140. In case this test is successful, GBP/USD will move towards the next resistance level, which is located at the 20 EMA at 1.3155.

A move above the 20 EMA will push GBP/USD towards the resistance at 1.3175. In case GBP/USD manages to settle above 1.3175, it will head towards the next resistance level at 1.3200.

On the support side, the nearest support level for GBP/USD is located at 1.3110. If GBP/USD gets below this level, it will move towards the next support at 1.3080.

A successful test of the support at 1.3080 will push GBP/USD towards the support at 1.3050. If GBP/USD settles below this level, it will head towards the next support level at 1.3030.

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