GBP/USD Tests Support At 1.3490

Key Insights

• Traders rush to the safety of the U.S. dollar as Russia attacks Ukraine
• Global markets are under pressure
• Today’s economic reports will have minimal impact on currency dynamics as the world is focused on the war in Ukraine

U.S. Dollar Gains Ground Against British Pound

GBP/USD is currently trying to settle below the support at 1.3490, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index moved above the 96.50 level after Russia announced a military operation in Ukraine, which triggered a rush into safe-haven assets. Currently, U.S. Dollar Index is trying to settle above the next resistance level at 96.70. In case this attempt is successful, the U.S. Dollar Index will move towards the resistance at the 97 level, which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the war in Ukraine, and the economic reports will take a back seat. That said, traders will have a chance to take a look at the second estimate of the fourth-quarter U.S. GDP Growth Rate report which is expected to show that GDP increased by 7% on a quarter-over-quarter basis.

Initial Jobless Claims report is expected to show that 235,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are expected to decline from 1.59 million to 1.58 million.

Technical Analysis

GBP/USD is testing the support at 1.3490. If GBP/USD manages to settle below this level, it will move towards the next support level, which is located at 1.3465. A successful test of this level will open the way to the test of the support at 1.3450.

If GBP/USD declines below 1.3450, it will move towards the next support at 1.3420. A move below this level will open the way to the test of the support at 1.3390.

On the upside, a move above 1.3490 will push GBP/USD towards the 50 EMA at 1.3530. In case GBP/USD gets above this level, it will head towards the next resistance level at the 20 EMA at 1.3555. A move above the 20 EMA will push GBP/USD towards the resistance at 1.3575.

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