GBP/USD Tests Resistance At 1.3625

U.S. Dollar Is Flat Against British Pound

GBP/USD is currently trying to settle above the resistance at 1.3625 while U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index remains stuck near the support level which is located at the 50 EMA at 95.80. In case the U.S. Dollar Index manages to stay above this level, it will move towards the nearest resistance level at 96 which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at Retail Sales data from UK. Analysts expect that UK Retail Sales increased by 1% month-over-month in January. On a year-over-year basis, Retail Sales are projected to grow by 8.7%.

In the U.S., traders will focus on the Existing Home Sales report. The report is projected to show that Existing Home Sales declined by 1% month-over-month in January.

Traders will also keep an eye on the developments in U.S. government bond markets as the yield of 10-year Treasuries stays close to the 2.00% level. In case tensions over Ukraine decrease in the upcoming days, traders will focus on inflation, and the yield may move back to the recent highs near 2.06% which will be bullish for the American currency.

Technical Analysis

GBP/USD is currently testing the resistance level at 1.3625. In case GBP/USD manages to settle above this level, it will move towards the resistance at 1.3650.

A successful test of the resistance at 1.3650 will push GBP/USD towards the resistance at 1.3690. In case GBP/USD gets above this level, it will head towards the next resistance level which is located at 1.3715.

On the support side, the previous resistance level at 1.3600 will serve as the first support level for GBP/USD. If GBP/USD declines below this level, it will move towards the next support at 1.3575. A move below 1.3575 will open the way to the test of the support at the 20 EMA at 1.3555.

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