GBP/USD Tests Support At 1.3575 As Demand For Safe-Haven Dollar Grows

British Pound Is Losing Ground Against U.S. Dollar

GBP/USD is currently trying to get below the support level at 1.3575 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 96.25. In case this test is successful, the U.S. Dollar Index will gain additional upside momentum and head towards the next resistance at 96.50 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the economic data from U.S. Analysts expect that Manufacturing PMI increased from 55.5 in January to 56 in February. Services PMI is projected to grow from 51.2 in January to 53 in February.

CB Consumer Confidence is expected to decline from 113.8 in January to 110 in February due to the negative impact of high inflation. Case-Shiller Home Price Index is projected to increase by 0.8% month-over-month in December.

Traders will also keep an eye on the developments on the geopolitical front as tensions between Russia and Ukraine continue to grow at a fast pace. In this environment, demand for safe-haven assets may increase, which will be bullish for the American currency.

Technical Analysis

GBP/USD declined below the support level at 1.3600 and is testing the next support at 1.3575. In case this test is successful, GBP/USD will head towards the support at the 20 EMA at 1.3560.

A successful test of the support level at the 20 EMA will open the way to the test of the next support which is located at the 50 EMA at 1.3530. If GBP/USD declines below this level, it will head towards the next support at 1.3490.

On the upside, the previous support at 1.3600 will serve as the first resistance level for GBP/USD. In case GBP/USD climbs back above this level, it will move towards the next resistance level at 1.3625. A successful test of this resistance level will push GBP/USD towards the resistance at 1.3650. If GBP/USD gets above 1.3650, it will move towards the resistance at 1.3690.

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