GBP/USD Tests Support At 1.3200

Key Insights

• British pound continues to move lower after yesterday’s pullback. 
• Today, traders will focus on flash PMI reports from the UK. 
• A move below 1.3200 will push GBP/USD towards the support level at 1.3175.

British Pound Is Losing Ground Against U.S. Dollar

GBP/USD is currently trying to settle below the 20 EMA near 1.3200, while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the resistance at 98.70. In case the U.S. Dollar Index manages to settle above this level, it will get to the test of the next resistance at 99, which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the flash PMI reports from the UK. Analysts expect that UK Manufacturing PMI declined from 58 in February to 56.7 in March. UK Services PMI is expected to decrease from 60.5 to 58.

Yesterday, UK reported that Inflation Rate increased by 6.2% year-over-year in February, compared to analyst consensus of 5.9%. The flash PMI reports will show whether rising prices have already put notable pressure on the manufacturing and services segments.

Technical Analysis

GBP/USD is testing the support level at 1.3200. In case this test is successful, GBP/USD will move towards the next support, which is located at 1.3175.

A move below the support at 1.3175 will open the way to the test of the support at 1.3140. If GBP/USD declines below this level, it will head towards the support at 1.3110. A successful test of the support at 1.3110 will push GBP/USD towards the next support level at 1.3080.

On the upside, a move above the 20 EMA near 1.3200 will push GBP/USD towards the resistance level at 1.3230. In case GBP/USD climbs back above this level, it will head towards the next resistance at 1.3270. A successful test of this level will push GBP/USD towards the resistance at the recent highs at 1.3300.

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