GBP/USD Stays Close To The 20 EMA

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD continues its attempts to settle below the support at the 20 EMA at 1.3535 while U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the resistance at 96.25 and is moving towards the support level at 96. In case the U.S. Dollar Index declines below this level, it will head towards the support at the 50 EMA at 95.85 which will be bullish for GBP/USD.

UK has recently released Claimant Count Change report for January which indicated that the number of people claiming unemployment benefits decreased by 31,900 in January compared to analyst consensus which called for a decline of 28,000. Unemployment Rate remained unchanged at 4.1%.

Today, foreign exchange market traders will also take a look at Producer Prices report from the U.S. Analysts expect that Producer Prices increased by 0.5% month-over-month in January. On a year-over-year basis, Producer Prices are projected to grow by 9.1%. The market will be sensitive to Producer Prices data as it may have an impact on Fed’s decisions at the next meeting.

Technical Analysis

GBP/USD continues to test the support level at the 20 EMA at 1.3535. In case GBP/USD manages to settle below this level, it will head towards the next support at the 50 EMA at 1.3515.

If GBP/USD declines below the 50 EMA, it will head towards the support level which is located at 1.3490. A successful test of this level will open the way to the test of the next support at 1.3465.

On the upside, GBP/USD needs to stay above the 20 EMA to have a chance to gain upside momentum in the near term. The next resistance is located at 1.3550.

In case GBP/USD settles above 1.3550, it will head towards the resistance at 1.3575. A move above this level will open the way to the test of the resistance at 1.3600. If GBP/USD gets above 1.3600, it will head towards the resistance at 1.3625.

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