GBP/USD Tests Resistance At 1.3110

Key Insights

• GBP/USD is gaining some ground after the strong sell-off. 
• The dynamics of demand for safe-haven assets will be the key driver for GBP/USD today. 
• A successful test of the resistance at 1.3110 will push GBP/USD towards the next resistance level at 1.3135.

British Pound Rebounds Against U.S. Dollar

GBP/USD is currently trying to settle back above 1.3110, while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the resistance at 99.20 and is testing the support level at 99. In case this test is successful, the U.S. Dollar Index will move towards the support at 98.70, which will be bullish for GBP/USD.

Today, foreign exchange market traders will stay focused on geopolitical developments and general market sentiment. WTI oil is trading above the $125 level while Brent oil has managed to settle above $130, which is bad for the world economy.

The U.S. dollar has pulled back after the strong rally. but concerns over the future economic growth may provide additional support to safe-haven assets, which will be bullish for the American currency.

Technical Analysis

GBP/USD is testing the resistance level at 1.3110. In case GBP/USD manages to settle above this level, it will head towards the next resistance level, which is located at 1.3135. RSI remains in the oversold territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

A successful test of the resistance at 1.3135 will push GBP/USD towards the next resistance at 1.3175. If GBP/USD gets above this level, it will head towards the resistance at 1.3200. A move above 1.3200 will open the way to the test of the resistance at 1.3230.

On the support side, a move below 1.3110 will push GBP/USD towards the support at 1.3080. In case GBP/USD declines below this level, it will head towards the next support level at 1.3030. A successful test of the support at 1.3030 will open the way to the test of the support at 1.3000.

For a look at all of today’s economic events, check out our economic calendar.