GBP/USD Tests Support At 1.3000

Key Insights

• U.S. dollar is moving higher at the start of the week as demand for safe-haven assets stays strong. 
• UK Manufacturing Production and Industrial Production reports missed analyst estimates. 
• A move below the support at 1.3000 will push GBP/USD towards the next support at 1.2970.

British Pound Is Under Pressure Against U.S. Dollar

GBP/USD is currently trying to settle below the support level at 1.3000, 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 at 100. If the U.S. Dollar Index manages to settle above this level, it will move towards the next resistance at 100.30, which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on economic reports from the UK. GDP report indicated that GDP increased by 0.1% month-over-month in February, compared to analyst consensus which called for growth of 0.3%.

Manufacturing Production declined by 0.4% month-over-month in February, while analysts expected that it would grow by 0.3%. On a year-over-year basis, Manufacturing Production increased by 3.6%. Industrial Production decreased by 0.6% month-over-month.

Technical Analysis

GBP/USD managed to settle below the support level at 1.3030 and is testing the next support, which is located at 1.3000. RSI is close to the oversold territory, but there is enough room to gain additional momentum in case the right catalysts emerge.

In case GBP/USD declines below the support at 1.3000, it will head towards the next support level at 1.2970. A move below the support at 1.2970 will open the way to the test of the support at 1.2940. If GBP/USD settles below 1.2940, it will continue its downside move and head towards the support at 1.2915.

On the upside, the previous support level at 1.3030 will serve as the first resistance level for GBP/USD. In case GBP/USD manages to settle back above this level, it will head towards the next resistance level, which is located at 1.3050. A successful test of the resistance at 1.3050 will open the way to the test of the resistance at 1.3080.

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