GBP/USD Tests Support At 1.3140

Key Insights

• GBP/USD is moving lower as Treasury yields are testing new highs. 
• The dynamics of U.S. government bond markets will likely serve as the main catalyst for GBP/USD today. 
• A move below 1.3140 will push GBP/USD towards the support at 1.3110.

British Pound Is Losing Ground Against U.S. Dollar

GBP/USD is currently trying to settle below the support at 1.3140, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle above the resistance at 99 and is testing the next resistance level at 99.20. If the U.S. Dollar Index gets above this level, it will move towards the next resistance at 99.45, which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the Wholesale Inventories report from the U.S. Analysts expect that Wholesale Inventories increased by 0.7% month-over-month in February after growing by 0.8% in January.

Traders will also keep an eye on the developments in U.S. government bond markets as Treasury yields continue to move higher. Currently, the yield of 10-year Treasuries is trying to settle above the psychologically important 2.50% level. In case this attempt is successful, the yield of 10-year Treasuries will gain additional upside momentum, which will be bullish for the American currency.

Technical Analysis

GBP/USD is testing the support level at 1.3140. In case this test is successful, GBP/USD will move towards the next support level, which is located at 1.3110.

A move below the support at 1.3110 will open the way to the test of the support at 1.3080. If GBP/USD declines below this level, it will continue its pullback and head towards the support level at 1.3050.

On the upside, the previous support level at 1.3175 will serve as the first resistance level for GBP/USD. If GBP/USD manages to settle above this level, it will move towards the next resistance level at the 20 EMA at 1.3200. A move above the 20 EMA at 1.3200 will push GBP/USD towards the next resistance level at 1.3230.

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