In This Article:
Key Insights
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GBP/USD is losing ground at the start of the week.
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Today, traders will focus on Manufacturing PMI reports from the U.S.
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A successful test of the support at 1.2565 will push GBP/USD towards the next support level at 1.2530.
British Pound Is Losing Ground Against U.S. Dollar
GBP/USD is currently trying to settle below the support level at 1.2565, while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index has recently managed to settle back above the resistance at 103.25 and is moving towards the next resistance level at 103.60. In case the U.S. Dollar Index climbs above the resistance at 103.60, it will head towards the next resistance level at 103.80, which will be bearish for GBP/USD.
Today, foreign exchange market traders will have a chance to take a look at the final reading of the Manufacturing PMI report for April. Analysts expect that Manufacturing PMI improved from 58.8 in March to 59.7 in April.
Traders will also focus on the ISM Manufacturing PMI report, which is expected to show that ISM Manufacturing PMI increased from 57.1 in March to 57.6 in April.
Technical Analysis
GBP/USD is testing the support level at 1.2565. In case this test is successful, GBP/USD will move towards the next support level, which is located at 1.2530. RSI remains in the moderate territory, but there is enough room to gain additional downside momentum in case the right catalysts emerge.
If GBP/USD manages to settle below the support at 1.2530, it will head towards the next support level at 1.2510. A move below 1.2510 will push GBP/USD towards the support at 1.2485.
On the upside, a move above 1.2565 will open the way to the test of the resistance level at 1.2600. In case GBP/USD settles above this level, it will gain upside momentum and head towards the next resistance at 1.2640. A successful test of this level will open the way to the test of the resistance at 1.2670.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire