GBP/USD Tests Resistance At 1.3510

British Pound Tries To Gain More Ground Against U.S. Dollar

GBP/USD is currently trying to settle above the 50 EMA at 1.3510 while U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle back below the 96 level. In case this attempt is successful, it will head towards the next support at the 20 EMA at 95.75 which will be bullish for GBP/USD.

Today, foreign exchange market traders will take a look at New Home Sales data from U.S. Analysts expect that New Home Sales declined by 3.2% month-over-month in December after growing by 12.4% in November.

The report will likely have minimal impact on currency dynamics as traders will focus on the Fed Interest Rate Decision and the subsequent commentary. The key question is whether Fed’s rhetoric gets more hawkish.

Prices are moving higher at a faster pace than previously expected, and traders fear that the Fed will have to aggressively raise rates. These fears have already put material pressure on S&P 500 and provided some support to the American currency. In case the Fed is not hawkish enough, the U.S. dollar may find itself under pressure.

Technical Analysis

GBP/USD is testing the resistance level at the 50 EMA at 1.3510. In case this test is successful, GBP/USD will move towards the next resistance at 1.3535.

A successful test of the resistance at 1.3535 will open the way to the test of the resistance which is located at the 20 EMA at 1.3555. If GBP/USD gets above the 20 EMA, it will continue its upside move and head towards the next resistance level at 1.3575.

On the support side, the nearest support level for GBP/USD is located at 1.3490. In case GBP/USD manages to settle back below this level, it will move towards the next support level at 1.3465. A move below the support at 1.3465 will push GBP/USD towards the next support near the recent lows at 1.3435.

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