In This Article:
Key Insights
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British pound is losing ground as traders are worried about the health of the British economy.
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Treasury yields continue to move higher, which is bullish for the U.S. dollar.
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A successful test of the support at 1.2275 will push GBP/USD towards the next support level at 1.2260.
British Pound Remains Under Strong Pressure At The Start Of The Week
GBP/USD is currently trying to settle below the support level at 1.2275, while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index is testing the resistance level at 104. In case this test is successful, the U.S. Dollar Index will move towards the next resistance level at 104.25, which will be bearish for GBP/USD.
Today, foreign exchange market traders will take a look at the Wholesale Inventories report from the U.S. Analysts expect that Wholesale Inventories increased by 2.3% month-over-month in March after growing by 2.6% in February.
Traders will also focus on the U.S. Consumer Inflation Expectations report for April. The report is expected to show that Consumer Inflation Expectations increased from 6.6% in March to 6.8% in April.
It should be noted that Treasury yields continue to move higher, and the yield of 30-year Treasuries is trying to get above the 3.25% level. A move above this level will open the way to the test of the 3.30% level, which will be bullish for the U.S. dollar.
Technical Analysis
GBP/USD is testing the support level at 1.2275. In case this test is successful, GBP/USD will head towards the next support, which is located at 1.2260.
A move below the support at 1.2260 will open the way to the test of the next support level at 1.2240. If GBP/USD declines below this level, it will head towards the support level at 1.2200.
On the upside, the previous support at 1.2290 will serve as the first resistance level for GBP/USD. If GBP/USD manages to settle back above this level, it will head towards the next resistance level at 1.2325.
A successful test of the resistance at 1.2325 will push GBP/USD towards the next resistance at 1.2365. In case GBP/USD moves above this level, it will head towards the resistance at 1.2380.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire