GBP/USD Tests Resistance At 1.3300

Key Insights

• British pound gains more ground after yesterday’s strong rally. 
• Traders wait for the release of inflation data from the UK. 
• A move above 1.3300 will push GBP/USD towards the resistance level at 1.3325.

British Pound Moves Higher Against U.S. Dollar

GBP/USD has recently made an attempt to settle above the resistance at 1.3300, while the U.S. dollar was mostly flat against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle below the nearest support level at 98.35. In case the U.S. Dollar Index manages to settle below this level, it will move towards the support at the 20 EMA at 98, which will be bullish for GBP/USD.

Today, foreign exchange market traders will focus on the inflation data from the UK. Analysts expect that UK Inflation Rate increased by 0.6% month-over-month in February after falling by 0.1% in January. On a year-over-year basis, UK Inflation Rate is projected to increase by 5.9%. UK Core Inflation Rate is expected to grow by 5% year-over-year.

Traders will also keep an eye on the UK Retail Price Index report, which is expected to show that retail prices increased by 0.8% month-over-month in February. On a year-over-year basis, retail prices are expected to grow by 8.2%.

The reports may have a significant impact on currency dynamics as traders are focused on inflation data after the recent rally in commodity markets.

Technical Analysis

GBP/USD is testing the resistance at 1.3300. In case this test is successful, GBP/USD will move towards the next resistance level, which is located at the 50 EMA at 1.3325.

A move above the resistance at the 50 EMA will open the way to the test of the next resistance at 1.3350. If GBP/USD gets above this level, it will head to the next resistance level at 1.3370.

On the support side, the previous resistance at 1.3270 will serve as the first support level for GBP/USD. In case GBP/USD declines below this level, it will move towards the support at 1.3230. A move below 1.3230 will push GBP/USD towards the 20 EMA, which is located near 1.3215.

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