GBP/USD Stabilized After Yesterday’s Sell-Off

Key Insights

• U.S. dollar tries to gain more ground against British pound as Treasury yields move higher. 
• Today, traders will also focus on home price data from the U.S.
• A move below the support at 1.3080 will push GBP/USD towards the support level at 1.3050.

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD continues its attempts to settle below the support at 1.3080, while the U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the resistance at 99.20 and pulled back towards the support level at 99. In case the U.S. Dollar Index declines below this level, it will move towards the next support at 98.70, which will be bullish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the Case-Shiller Home Price Index report from the U.S. Analysts expect that home prices increased by 1% month-over-month in January after growing by 1.1% in December.

Traders will also focus on the dynamics of U.S. government bond markets. The yield of 2-year Treasuries is currently trying to get above yearly highs at 2.42%, which may provide more support to the American currency.

Technical Analysis

GBP/USD has recently made another attempt to settle below the support level at 1.3080 but failed to develop sufficient downside momentum and rebounded towards the 1.3100 level.

In case GBP/USD manages to settle below the support at 1.3080, it will head towards the next support level, which is located at 1.3050. A move below this level will push GBP/USD towards the support at 1.3030. If GBP/USD declines below 1.3030, it will head towards the support level at 1.3000.

On the upside, the previous support at 1.3110 will serve as the first resistance level for GBP/USD. In case GBP/USD gets back above this level, it will head towards the next resistance at 1.3140.

A successful test of the resistance at 1.3140 will open the way to the test of the resistance at 1.3175. If GBP/USD climbs back above this level, it will get to the test of the next resistance at the 20 EMA at 1.3185.

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