GBP/USD Tests Resistance At 1.3175

Key Insights

• Yesterday, BoE raised the interest rate from 0.5% to 0.75%.
• BoE has also signaled that additional rate hikes might be appropriate in the coming months.
• GBP/USD needs to settle above 1.3175 to continue its upside move. 

British Pound Gains Ground Ahead Of The Weekend

GBP/USD continues its attempts to settle above the resistance at 1.3175, while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 98. In case this test is successful, the U.S. Dollar Index will move towards the next resistance at 98.35, which will be bearish for GBP/USD.

Yesterday, the Bank of England increased the interest rate from 0.5% to 0.75%. BoE noted that inflationary pressure will grow due to the recent developments in commodity markets and supply chain problems. BoE also added that “some further modest tightening in monetary policy may be appropriate in the coming months.”

Today, foreign exchange market traders will have a chance to take a look at the Existing Home Sales report from the U.S. The report is expected to show that Existing Home Sales declined by 5% month-over-month in February after growing by 6.7% in January.

Technical Analysis

GBP/USD is testing the resistance level at 1.3175. In case this test is successful, GBP/USD will move towards the next resistance at 1.3200.

A move above the resistance at 1.3200 will lead to the test of the resistance at the 20 EMA at 1.3210. In case GBP/USD climbs above the 20 EMA, it will gain additional upside momentum and head towards the resistance level at 1.3230.

On the support side, the nearest support level for GBP/USD is located at 1.3140. In case GBP/USD declines below this level, it will move towards the next support at 1.3110. A successful test of the support at 1.3110 will push GBP/USD towards the support at 1.3080.

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