GBP/USD Video 20.01.21.
U.S. Dollar Is Losing Ground Against British Pound
GBP/USD is currently trying to settle above the resistance at 1.3665 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index managed to settle below the support at 90.50 and is trying to get below the next support level at the 20 EMA at 90.35. If the U.S. Dollar Index declines below the 20 EMA, it will head towards the 90 level which will be bullish for GBP/USD.
Today, the UK will provide inflation data for December. Analysts expect that Inflation Rate increased by 0.2% month-over-month. On a year-over-year basis, Inflation Rate is projected to grow by 0.5%. Meanwhile, Core Inflation Rate is expected to grow by 1.3%.
In addition to UK inflation data, foreign exchange market traders will focus on the Inauguration Day in the U.S. The U.S. dollar pulled back from recent highs as the support from the recent increase in U.S. Treasury yields was not sufficient enough to push it higher, and traders will keep an eye on any dovish comments from Biden’s economic team.
GBP/USD gained upside momentum and is trying to settle above the nearest resistance level at 1.3665. If this attempt is successful, GBP/USD will head towards the next resistance at 1.3710. RSI is in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.
A move above 1.3710 will open the way to the test of the resistance at 1.3755. In case GBP/USD gets above the resistance at 1.3755, it will move towards the resistance at 1.3785.
On the support side, the nearest support for GBP/USD is located at 1.3625. In case GBP/USD declines below this level, it will move towards the next support level which is located at the 20 EMA at 1.3585.
The next support is located at 1.3575, so GBP/USD will likely receive material support in the 1.3575 – 1.3585 area. A move below this support area will push GBP/USD towards the support at 1.3540.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire