GBP / USD Video 10.06.21.
British pound remained virtually unchanged against the US dollar
GBP / USD is currently trying to gain a foothold below the 1.4100 support, while the US dollar is strengthening against a broad basket of currencies.
The US dollar index is testing resistance at the 20-day moving average at 90.20. If this test succeeds, the US Dollar Index will move towards the next significant resistance at 90.50, which will be bearish for GBP / USD.
Forex traders will focus on US inflation data today. Analysts expect inflation to rise 4.7% in May over the same period last year. On a monthly basis, inflation is forecast to rise by 0.4%. Core inflation is expected to rise 3.4% year over year.
These inflation reports are the main event of the week for the US currency. Treasury yields have declined recently, indicating that traders are willing to ignore inflationary risks.
However, the situation could quickly change if reports show that the inflation rate in the US in May exceeded 5%. In this case, the Fed may be forced to cut its support earlier than expected, which will be bullish for the US dollar and bearish for riskier assets.
GBP / USD has managed to gain a foothold below the 20-day EMA at 1.4135 and is testing support at 1.4100. If the test is successful, GBP / USD will move to the next support level of 1.4080.
A move below the support at 1.4080 would open the way to testing the next support, which is located at the 50-EMA at 1.4055. In the event that GBP / USD falls below the 50 EMA, it will head towards support at 1.4020.
On the other hand, the previous support at the 20-day EMA at 1.4135 will serve as the first resistance level for the GBP / USD. If GBP / USD rises above this level, it will move towards the next resistance at 1.4150. A successful test of the resistance at 1.4150 will push the GBP / USD towards the resistance at 1.4180.
For all of today’s economic events, check out our economic calendar.