GBP/USD Tries To Rebound After Major Sell-Off

Key Insights

• GBP/USD found some support after a multi-day sell-off. 
• However, demand for the safe-haven U.S. dollar stays strong.
• A move above 1.2600 will push GBP/USD towards the resistance level at 1.2640.

British Pound Gains Some Ground Against U.S. Dollar

GBP/USD is currently trying to settle back above the resistance at 1.2600, 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 102.20 and is trying to get above the next resistance level at 102.50. In case the U.S. Dollar Index climbs above 102.50, it will head towards the next resistance at 102.75, which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the Pending Home Sales report from the U.S. Analysts expect that Pending Home Sales declined by 1.6% month-over-month in March. On a year-over-year basis, Pending Home Sales are projected to decrease by 5%.

Traders will also keep an eye on the general market sentiment. Traders remain worried about aggressive rate hikes from the Fed and the slowdown of the world economy, which is bullish for the safe-haven U.S. dollar.

Technical Analysis

GBP/USD failed to settle below the support level at 1.2565 and made an attempt to settle above the resistance at 1.2600.

In case GBP/USD manages to settle above 1.2600, it will head towards the next resistance level, which is located at 1.2640. A successful test of this level will open the way to the test of the next resistance at 1.2670.

On the support side, GBP/USD needs to settle below 1.2565 to continue its downside move. The next support level for GBP/USD is located at 1.2530.

In case GBP/USD declines below the support at 1.2530, it will head towards the next support level at 1.2510. A move below this level will push GBP/USD towards the support at 1.2485.

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