U.S. Dollar Maintains Momentum
GBP/USD declined to 1.3300 as the U.S. dollar continued to gain ground against a broad basket of currencies.
The U.S. Dollar Index is currently trying to settle above the 20 EMA at 93. In case this attempt is successful, the U.S. dollar will likely gain additional upside momentum which would be bearish for GBP/USD.
Today, traders will pay attention to Services PMI reports from UK and U.S. UK Services PMI is projected to grow from 56.5 to 60.1, while U.S. Services PMI is expected to increase from 50 to 54.8.
Earlier this week, encouraging Manufacturing PMI data provided material support to the U.S. dollar, and Services PMI reports may also have a significant impact on GBP/USD trading dynamics.
In addition to Services PMI, traders will focus on new U.S. employment reports. Initial Jobless Claims are expected to decline to 950,000 while Continuing Jobless Claims are projected to fall to 14 million.
Yesterday’s ADP Employment Change report was disappointing but did not put any pressure on the U.S. dollar. However, additional negative suprises on the job front may stop the current rebound of the American currency.
Technical Analysis
GBP/USD quickly fell to 1.3300 since the previous upside move was fast and no material levels were formed between 1.3270 and 1.3425.
The nearest support level for GBP/USD is located at 1.3270. In case GBP/USD manages to settle below 1.3270, it will gain more downside momentum and head towards the next support at the 20 EMA at 1.3210.
The 20 EMA will likely serve as a major support level for GBP/USD as the bulls will try to defend it since a move below the 20 EMA will mark the end of the upside momentum.
If GBP/USD settles below the 20 EMA, it will head towards the next support level at 1.3110.
On the upside, the nearest resistance for GBP/USD is located at 1.3425. As I noted above, the recent moves were so fast that no important levels were formed between 1.3270 and 1.3425. Thus, GBP/USD may quickly get back to the resistance at 1.3425 if the right catalysts emerge.
A move above the resistance at 1.3425 will allow GBP/USD to continue its upside trend, pushing it closer to 1.3500. #GBP/USD##FX#
Reprinted from Fxempire，the copyright all reserved by the original author.
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