GBP/USD Tests Support At 1.3030

Key Insights

• British pound is under pressure at the start of the week. 
• Markets hope for progress in Russia – Ukraine negotiations, but demand for the U.S. dollar stays strong.
• A successful test of the support at 1.3030 will open the way to the test of the next support at 1.3000.

British Pound Is Losing Ground Against U.S. Dollar

GBP/USD is currently trying to settle below the support at 1.3030, while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 99.20. If this test is successful, the U.S. Dollar Index will move towards the next resistance at 99.45, which will be bearish for GBP/USD.

There are no important economic reports scheduled to be released in the U.S. and UK today, so foreign exchange market traders will focus on general market sentiment and geopolitical developments.

The negotiations between Russia and Ukraine are expected to resume today, and markets hope that they will bring positive results. S&P 500 futures are moving higher in premarket trading, while gold is under pressure.

However, demand for the safe-haven U.S. dollar stays strong as the yield of 10-year Treasuries is trying to settle above yearly highs at 2.06%. In case this attempt is successful, the yield of 10-year Treasuries will move towards the 2.10% level, which will be bullish for the American currency.

Technical Analysis

GBP/USD is testing the support level at 1.3030. If GBP/USD manages to settle below this level, it will move towards the next support at the recent lows at 1.3000.

A successful test of the support at 1.3000 will open the way to the test of the support at 1.2970. In case GBP/USD gets below this level, it will head towards the next support at 1.2940. A move below the support at 1.2940 will open the way to the test of the support at 1.2915.

On the upside, GBP/USD needs to settle back above 1.3030 to have a chance to gain upside momentum in the near term. The next resistance level is located at 1.3050.

In case GBP/USD gets above 1.3050, it will head towards the resistance at 1.3080. A successful test of this level will push GBP/USD towards the next resistance level at 1.3110.

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