GBP/USD Tests Resistance At 1.2510

Key Insights

• The U.S. Dollar Index faced resistance near yearly highs. 
• Today, traders will focus on the final reading of the UK Manufacturing PMI report for April. 
• A successful test of the resistance at 1.2510 will lead to the test of the next resistance level at 1.2530.

British Pound Gains Some Ground Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.2510, while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the resistance level at 103.60. In case the U.S. Dollar Index manages to settle above this level, it will move towards the next resistance at 103.80, which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the final reading of the UK Manufacturing PMI report for April. Analysts expect that UK Manufacturing PMI increased from 55.2 in March to 55.3 in April.

Traders will also take a look at the Factory Orders report from the U.S., which is expected to show that Factory Orders increased by 1.1% month-over-month in March.

Trading will likely remain choppy today as traders prepare for the Fed Interest Rate Decision, which will be released on Wednesday. The rate is expected to be raised from 0.5% to 1%.

Technical Analysis

GBP/USD is testing the resistance level at 1.2510. In case this test is successful, GBP/USD will get to another test of the next resistance, which is located at 1.2530. RSI is in the oversold territory, and there is plenty of room to gain upside momentum in case the right catalysts emerge.

A move above the resistance at 1.2530 will push GBP/USD towards the resistance at 1.2565. In case GBP/USD manages to settle above this level, it will head towards the next resistance at 1.2600.

On the support side, a move below 1.2510 will push GBP/USD towards the support level, which has recently emerged at 1.2475. If GBP/USD declines below the support at 1.2475, it will head towards the next support level at 1.2450. A successful test of this level will push GBP/USD towards the support near yearly lows at 1.2415.

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