British pound gains ground against US dollar
GBP / USD continues to trade near 20 EMA at 1.3325 while the US Dollar is broadly stable against a large basket of currencies.
The US dollar index remains stuck in the range between support at 90.50 and resistance at 91. Yesterday the US dollar index attempted to move below support at 90.50 but this attempt failed. gave no results. In the event that the US dollar index drops below 90.50, it will move towards the 90 level which will be bullish for the GBP / USD pair.
Today, forex traders will focus on UK economic data. The unemployment rate is expected to drop from 4.8% in September to 5.1% in October due to the negative impact of the second wave of the virus.
Meanwhile, the report on the change in the number of claimants is expected to show that the number of people claiming unemployment benefits rose by 30,000 in November.
Traders will also continue to follow Brexit updates. At this point, it is not clear whether the UK and the EU have made any progress in the negotiations, so the UK pound is likely to remain volatile.
GBP / USD is currently trying to move above the 20 EMA at 1.3325. If this attempt is successful, GBP / USD will head to the next resistance level at 1.3400. A move above this level will push GBP / USD towards resistance at 1.3440.
Yesterday GBP / USD tested resistance at 1.3440 but failed to gain momentum on the upside and fell back below 1.3400. At this point, it looks like GBP / USD will need additional catalysts to break above 1.3440. If the GBP / USD moves above this level, it will head to the next resistance level at 1.3485.
On the support side, the 20 EMA will likely serve as the first level of support for GBP / USD. A move below 20 EMA will push GBP / USD towards the next support at 1.3300.
In the event that GBP / USD moves below the support at 1.3300, it will move lower towards the support at 1.3270. A successful test of the support at 1.3270 will push the GBP / USD towards the next support at the 50 EMA at 1.3230.
For an overview of all of today’s economic events, check out our economic calendar.