GBP/USD Moves Higher Ahead Of PMI Data

British Pound Gains Ground Against U.S. Dollar

GBP/USD continues its attempts to settle above the resistance at 1.3625 while U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is testing the support level at the 50 EMA at 95.80. This support level has already been tested many times in recent trading sessions and proved its strength. In case the U.S. Dollar Index settles below 95.80, it will gain downside momentum and move towards the support at 95.40 which will be bullish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the flash reading of PMI reports from UK. Analysts expect that UK Manufacturing PMI declined from 57.3 in January to 57.2 in February while UK Services PMI is expected to increase from 54.1 to 55.5.

Traders will also monitor the upcoming developments in U.S. government bond markets, which will open on Tuesday after today’s holiday. The yield of 10-year Treasuries managed to settle below the 2.00% level and is trying to settle below 1.95%. In case this attempt is successful, it will move towards the 20 EMA at 1.90% which will be bearish for the American currency.

Technical Analysis

GBP/USD is trying to get above the nearest resistance level at 1.3625. In case this attempt is successful, GBP/USD will move towards the next resistance which is located at 1.3650.

A move above the resistance level at 1.3650 will open the way to the test of the resistance at 1.3690. If GBP/USD manages to settle above 1.3690, it will head towards the next resistance level which is located at 1.3715.

On the support side, the nearest support for GBP/USD is located at 1.3600. In case GBP/USD manages to settle back below this level, it will gain additional downside momentum and head towards the support level at 1.3575. A successful test of the support at 1.3575 will lead to the test of the next support which is located at the 20 EMA near 1.3565.

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