U.S. Dollar Is Mostly Flat Against British Pound
GBP/USD is currently trying to settle below the support at the 20 EMA at 1.3530 while U.S. dollar is flat against a broad basket of currencies.
The U.S. Dollar Index remains stuck in the range between the support level at 95.40 and the resistance level at the 50 EMA at 95.75. In case the U.S. Dollar Index manages to get to the test of the 50 EMA, GBP/USD will find itself under more pressure.
There are no important economic reports scheduled to be released in the UK today, so foreign exchange market traders will focus on the ultra-important inflation data from U.S.
Analysts expect that Inflation Rate increased by 0.5% month-over-month in January. On a year-over-year basis, Inflation Rate is expected to reach a multi-decade high at 7.3%. Core Inflation Rate is projected to grow by 5.9% year-over-year.
These reports will have a big impact on currency dynamics. In this light, trading will likely stay calm until the inflation data is released, but traders should be prepared for fast moves once the reports are out.
GBP/USD is testing the support level at the 20 EMA at 1.3530. In case GBP/USD manages to settle below this level, it will head towards the next support level which is located at the 50 EMA at 1.3510.
A move below the 50 EMA will open the way to the test of the support at 1.3490. If GBP/USD declines below this level, it will continue its pullback and head towards the next support at 1.3465.
On the upside, the nearest resistance level for GBP/USD is located at 1.3550. In case GBP/USD manages to settle back above this level, it will gain additional upside momentum and head towards the next resistance which is located at 1.3575. A successful test of the resistance at 1.3575 will open the way to the test of the resistance level at 1.3600.
For a look at all of today’s economic events, check out our economic calendar.
Read More: GBP/USD Tests Support At 1.3530