GBP/USD Tests Support At 1.3525

British Pound Is Losing Some Ground Against U.S. Dollar

GBP/USD is currently trying to settle below the 20 EMA at 1.3525 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle back above 95.40 and is moving towards the resistance level which is located near the 50 EMA at 95.75. In case the U.S. Dollar Index gets above the 50 EMA, it will gain additional upside momentum and head towards the resistance at the 20 EMA at 95.95 which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at Halifax House Price Index report from the UK. Analysts expect that Halifax House Price Index increased by 0.8% month-over-month in January. On a year-over-year basis, Halifax House Price Index is expected to grow by 10.5%.

Traders will also continue to monitor the developments in U.S. government bond markets. The yield of 2-year Treasuries managed to get above the 1.30% level and is trying to gain additional upside momentum. In case this attempt is successful, it will move towards the 1.35% level which will be bullish for the American currency.

Technical Analysis

GBP/USD is testing the support level at 1.3525. In case this test is successful, GBP/USD will move towards the next support level which is located at the 50 EMA at 1.3505.

A move below the 50 EMA will push GBP/USD towards the next support at 1.3490. In case GBP/USD declines below this support level, it will continue its pullback and head towards the support at 1.3465.

On the upside, GBP/USD needs to stay above the 20 EMA at 1.3525 to have a chance to gain upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3550.

If GBP/USD gets above this level, it will head towards the next resistance level at 1.3575. A move above 1.3575 will push GBP/USD towards the resistance at 1.3600.

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