British pound tries to rebound against US dollar
GBP / USD is trading around 1.3300 as traders await the outcome of Brexit negotiations which are expected to be completed by the end of this week.
British Prime Minister Boris Johnson recently said there was a strong possibility of a no-deal Brexit. This scenario will likely put significant pressure on the British Pound, which is expected to remain volatile during today’s trading session as FX traders make their final bets on Brexit negotiations.
Meanwhile, the US dollar index, which measures the strength of the US dollar against a broad basket of currencies, is heading towards annual lows at 90.50. If the US dollar index moves below this level, it will gain additional bearish momentum which will be bullish for the GBP / USD.
The UK reported yesterday that industrial production rose 1.3% month-over-month in October, while manufacturing output rose 1.7%. Both reports were better than analysts’ estimates.
Today, the GBP / USD pair will remain very sensitive to any Brexit news, so traders should be prepared for rapid news-driven moves.
GBP / USD is currently trying to reach the test of the closest resistance level at 20 EMA at 1.3330. If this test is successful, GBP / USD will move towards the next resistance at 1.3400.
There are no significant levels between 1.3330 and 1.3400 so this move can be fast. In the event that GBP / USD manages to settle above resistance at 1.3400, it will head towards resistance at 1.3440.
On the support side, the closest support level for GBP / USD is at 1.3300. If the GBP / USD pair drops below this level, it will move towards the support at 1.3270.
A successful test of support at 1.3270 will pave the way for the next level of support at 50 EMA at 1.3225. If the GBP / USD breaks below the 50 EMA, it will head towards the support at 1.3180. It should be noted that the GBP / USD pair can easily move from level to level as traders react to Brexit news and rumors.
For an overview of all of today’s economic events, check out our economic calendar.