GBP/USD Tests Resistance At 1.3535

British Pound Continues To Gain Ground Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.3535 while U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle below the support level at 96.25. In case the U.S. Dollar Index declines below this level, it will move towards the next support at 96 which will be bullish for GBP/USD.

Today, foreign exchange market traders will focus on ADP Employment Change reprot from the U.S. Analysts expect that the report will show that private businesses hired 207,000 workers in January.

Markets will likely be sensitive to job data as it may have a material impact on Fed decision making. The yield of 2-year Treasuries remains close to recent highs near the 1.20% level, and it looks that bond traders stay ready to bet on aggressive rate hikes. Meanwhile, the U.S. dollar has been moving lower in recent trading sessions, but any uptick in yields may provide material support to the American currency.

Technical Analysis

GBP/USD is currently testing the resistance level at 1.3535. In case this test is successful, GBP/USD will head towards the next resistance level which is located at 1.3575. RSI remains in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.

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

On the support side, the nearest support for GBP/USD is located at the 20 EMA at 1.3510. In case GBP/USD manages to settle back below the 20 EMA, it will head towards the next support level which is located at the 50 EMA at 1.3495. A successful test of the support at 1.3495 will push GBP/USD towards the support at 1.3465.

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