British Pound Is Mostly Flat Against U.S. Dollar

Traders Stay Focused On Treasury Yields

GBP/USD is currently trying to settle below 1.3550 while U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index is moving towards the nearest resistance level which is located at the 50 EMA at 95.75. In case the U.S. Dollar Index manages to settle above this level, it will gain additional upside momentum and head towards the resistance at the 20 EMA at 95.90 which will be bearish for GBP/USD.

There are no important economic reports scheduled to be released in the U.S. and UK today, so foreign exchange market traders will focus on general market sentiment and the dynamics of U.S. government bond markets.

Currently, Treasury yields are pulling back from their recent highs. The yield of 2-year Treasuries failed to settle above 1.35% and declined towards 1.33%. Meanwhile, the yield of 10-year Treasuries moved below the 1.95% level. This pullback looks natural after the strong rally, and it remains to be seen whether lower yields will have a material impact on the American currency.

Technical Analysis

GBP/USD has recently made an attempt to settle above 1.3550 but failed to develop sufficient upside momentum and pulled back.

In case GBP/USD manages to settle below 1.3550, it will head towards the next support level at the 20 EMA at 1.3530. A move below the 20 EMA will open the way to the test of the support at the 50 EMA at 1.3510. If GBP/USD declines below this level, it will head towards the next support level which is located at 1.3490.

On the upside, GBP/USD needs to get back above 1.3550 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3575.

A move above the resistance at 1.3575 will push GBP/USD towards the resistance at 1.3600. In case GBP/USD gets above this level, it will head towards the resistance which is located near the recent highs at 1.3625.

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