GBP/USD Remains Under Pressure

U.S. Dollar Gains Ground Against British Pound

GBP/USD continues its attempts to settle below the support at the 20 EMA at 1.3525 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the resistance level at the 50 EMA at 95.75. In case this test is successful, the U.S. Dollar Index will gain additional upside momentum and head towards the next resistance at the 20 EMA at 95.90 which will be bearish for GBP/USD.

Today, foreign exchange market traders had a chance to take a look at BRC Retail Sales Monitor from the UK which indicated that retail sales increased by 8.1% on a year-over-year basis.

Traders will stay focused on the dynamics of U.S. government bond markets. The yield of 2-year Treasuries has recently moved to new highs near the 1.34% level. Meanwhile, the yield of 10-year Treasuries is trying to settle above 1.95%. In case this attempt is successful, the yield of 10-year Treasuries will move towards the psychologically important 2.00% level which will be bullish for the American currency.

Technical Analysis

GBP/USD continues to test the support level at the 20 EMA. In case GBP/USD manages to settle below this level, it will move towards the next support at the 50 EMA at 1.3505.

In case GBP/USD declines below the support at the 50 EMA, it will continue its pullback and head towards the next support level at 1.3490. A successful test of this level will open the way to the test of the support at 1.3465.

On the upside, a move above 1.3525 will push GBP/USD towards the resistance level which is located at 1.3550. In case GBP/USD manages to settle above the resistance at 1.3550, it will gain additional upside momentum and head towards the next resistance which is located at 1.3575. A successful test of the resistance at 1.3575 will push GBP/USD towards the resistance level at 1.3600.

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