GBP / USD Video 22.02.21.
The British pound starts strongly on Sunday
GBP / USD is currently trying to stay above 1.4000, while the US dollar is mostly flat against a broad basket of currencies.
The US dollar index recently repeated its attempt to fall below the nearest support level to 90.30, but failed to develop sufficient momentum. If the US dollar index manages to calm down below this level, it will move towards the next support at level 90, which will be bullish for GBP / USD.
There are no important economic reports in the US and the UK today, so traders in the foreign exchange market will focus on the general mood in the market. Britain’s successful mass vaccination program has recently provided significant support to the pound, while US stimulus hopes are putting pressure on the dollar.
If the mood in the global market continues to improve, the US currency could find itself under additional pressure. At the same time, traders will have to closely monitor developments in the US bond market, as rising treasury yields may ultimately provide a boost to the US dollar.
GBP / USD has managed to cross a psychologically important resistance level to 1.4000 and is trying to continue its rise. RSI is in the repurchased territory, so the risks of withdrawal are increasing. However, the current growth trend is strong, so the British pound has a decent chance of gaining a bigger position against the US dollar.
The closest resistance level for GBP / USD is at 1.4025. If GBP / USD manages to calm above this level, there will be a second test of the next resistance at 1.4050. A successful test of this level will push GBP / USD towards the next resistance at 1.4070.
On the support side, the previous resistance at 1.4000 will serve as the first support level for GBP / USD. If GBP / USD falls below this level, it will move towards the next support at 1.3980. A move below 1.3980 will push GBP / USD towards the next support at 1.3950.
To see all of today’s economic events, take a look at our economic calendar.