GBP/USD Tests Support At 1.3110

Key Insights

• GBP/USD is trading near yearly lows as demand for safe-haven assets stays strong.
• Global markets are under significant pressure, which is bullish for the American currency.
• A move below 1.3110 will push GBP/USD towards the support level at 1.3080.

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD is currently trying to settle below the support at 1.3110, while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the resistance at 99.20. In case the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 99.45, which will be bearish for GBP/USD.

Today, foreign exchange market traders will stay focused on geopolitical developments, which remain the key driver for markets. The third round of negotiations between Russia and Ukraine yielded no results, which was bullish for safe-haven assets.

Not surprisingly, the American currency is trading near yearly highs, while gold is testing the $2,000 level. S&P 500 declined by 3% yesterday, and S&P 500 futures are already down by more than 1% in premarket trading. Global markets remain nervous, so the U.S. dollar has a good chance to gain additional upside momentum today.

Technical Analysis

GBP/USD is testing the support level at 1.3110. If this test is successful, GBP/USD will move towards the next support level, which is located at 1.3080.

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

On the upside, GBP/USD needs to settle back above 1.3110 to have a chance to gain upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3135.

In case GBP/USD settles above 1.3135, it will head towards the resistance at 1.3175. A successful test of this level will push GBP/USD towards the resistance at 1.3200.

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