GBP/USD received strong support near 1.3325 and is trying to get to the test of the nearest resistance level at 1.3400.
British Pound Tries To Gain Upside Momentum Ahead Of The Weekend
GBP/USD is moving towards the nearest resistance level at 1.3400 while the U.S. dollar is losing ground against a broad basket of currencies.
Yesterday, the U.S. Dollar Index made an attempt to get to the test of the yearly lows at 91.75. It did not manage to gain sufficient downside momentum and rebounded back above the 92 level. Today, the U.S. Dollar Index returned back under 92 and is heading towards 91.75. If the U.S. Dollar Index manages to settle below this level, it will gain additional downside momentum which will be bullish for GBP/USD.
Today, foreign exchange market traders will focus on Brexit news as talks between EU and UK are set to resume in London. The market is optimistic about a deal so any negative news on this front may put significant pressure on the British pound.
Today, UK will release Nationwide Housing Prices report for November. Analysts expect that Nationwide Housing Prices will grow by 0.3% month-over-month. On a year-over-year basis, Nationwide Housing Prices are projected to increase by 5.4%.
GBP/USD continues to move higher in a rather tight upside channel. The nearest resistance level for GBP/USD is still located at 1.3400. This resistance level has already been tested several times and proved its strength.
If GBP/USD manages to settle above this level, it will gain additional upside momentum and head towards the next resistance at 1.3485. I’d note that GBP/USD will need sufficient interest from traders to get above the strong resistance at 1.3400, and it remains to be seen whether such interest will present itself in thin holiday trading.
A move above the resistance at 1.3485 will push GBP/USD towards the next resistance level at 1.3515.
On the support side, the nearest support level is located at 1.3325. This support level has been tested during the previous trading session, and GBP/USD attracted material buyers’ interest near 1.3325.
If GBP/USD declines below 1.3325, it will gain downside momentum and head towards the next support level at 1.3270. A move below 1.3270 will open the way to the test of the next support at the 20 EMA at 1.3250.