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British Pound Is Losing Ground Against U.S. Dollar
GBP/USD is currently trying to settle below the support at 1.3200 while U.S. dollar is losing some ground against a broad basket of currencies.
The U.S. Dollar Index has recently made an attempt to settle above the resistance at 96.70 but failed to develop sufficient upside momentum and pulled back towards 96.60. In case the U.S. Dollar Index manages to settle below this level, it will move towards the support at 96.50 which will be bullish for GBP/USD.
Today, UK will release CBI Industrial Trends Orders report for December, but foreign exchange market traders will likely focus on general market sentiment which will be dominated by worries over the spread of Omicron in Europe.
Support from BoE Interest Rate Decision proved to be short-lived as traders focused on coronavirus data from UK. The number of daily new cases in the UK is at all-time highs, and the British government may be forced to introduce additional virus containment measures despite Boris Johnson’s political problems. The fear of new restrictions may put additional pressure on the British pound in the upcoming trading sessions.
Technical Analysis
GBP/USD declined below the support at 1.3230 and is trying to settle below the next support level at 1.3200. In case this attempt is successful, GBP/USD will head towards the next support level which is located at 1.3170. RSI remains in the moderate territory, and there is enough room to gain additional downside momentum in case the right catalysts emerge.
A move below the support at 1.3170 will push GBP/USD towards the support at 1.3140. If GBP/USD moves below this level, it will head towards the next support level which is located at 1.3110.
On the upside, the previous support level at 1.3230 will serve as the first resistance level for GBP/USD. If GBP/USD gets above the resistance at 1.3230, it will head towards the next resistance at 1.3250. A move above this level will push GBP/USD towards the resistance at the 20 EMA at 1.3275.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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