British Pound Gains Ground Against U.S. Dollar
GBP/USD is currently trying to settle back above the resistance at 1.3280 while U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index has recently managed to get back below 96.25 and is trying to develop additional downside momentum. In case this attempt is successful, it will move towards the support level at 96 which will be bullish for GBP/USD.
UK has recently released Halifax House Price Index report for November. The report indicated that house prices increased by 1% month-over-month, in line with the analyst consensus. On a year-over-year basis, house prices grew by 8.2% compared to analyst consensus which called for growth of 7.8%.
Foreign exchange market traders will also keep an eye on the developments in U.S. government bond markets. Treasury yields continue to move higher, and the yield of 2-year Treasuries is already close to yearly highs near 0.65%. In case the yield of 2-year Treasuries gets above this level, it will gain additional upside momentum which could provide more support to the American currency.
GBP/USD is currently testing the resistance level at 1.3280. In case this test is successful, GBP/USD will move towards the next resistance at 1.3310.
A successful test of the resistance level at 1.3310 will open the way to the test of the next resistance which is located at the 20 EMA at 1.3345. In case GBP/USD manages to settle above the 20 EMA, it will move towards the resistance at 1.3375.
On the support side, GBP/USD needs to settle below 1.3280 to have a chance to develop downside momentum in the near term. The nearest material support level for GBP/USD is located at 1.3250. RSI is in the moderate territory, and there is enough room to gain downside momentum in case the right catalysts emerge.
A move below 1.3250 will push GBP/USD towards the next support at 1.3230. If GBP/USD gets below 1.3230, it will head towards the support at the recent lows at 1.3200.
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