GBP/USD is trading near the resistance level at 1.3710.
British Pound Lacks Momentum
GBP/USD is currently trading near the resistance level at 1.3710 while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index continues its attempts to settle above the resistance level at the 50 EMA at 90.80. If the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 91.10 which will be bearish for GBP/USD.
Yesterday, U.S. reported that Initial Jobless Claims declined from 914,000 to 847,000 while Continuing Jobless Claims decreased from 4.97 million to 4.77 million. The reports indicated that the situation in the job market has started to improve after the recent setback and provided some support to riskier assets. However, the U.S. dollar quickly found support and is currently moving higher against a broad basket of currencies.
As usual, foreign exchange market traders will pay attention to COVID-19 data from UK. The recent data is not inspiring as the number of new cases remains high which may ultimately put additional pressure on the British economy.
GBP/USD continues its attempts to settle above the resistance at 1.3710. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
If GBP/USD settles above 1.3710, it will move towards the next resistance level at the recent highs at 1.3745. A successful test of this level will open the way to the test of the next resistance at 1.3785. If GBP/USD gets above this level, it will move towards the resistance at 1.3800.
On the support side, the nearest support level for GBP/USD is located at 1.3665. If GBP/USD declines below this level, it will move towards the next support level at the 20 EMA at 1.3650. A move below the 20 EMA will push GBP/USD towards the next support at 1.3625.