GBP/USD is currently trying to settle above the 20 EMA at 1.3830 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index has managed to settle below the support at the 93 levels and is moving lower. The next support level for the U.S. Dollar Index is located at 92.70. If the U.S. Dollar Index gets to the test of this level, GBP/USD will get additional support.
British Pound Gains Ground Against U.S. Dollar
Yesterday, UK reported that Manufacturing PMI increased from 55.1 in February to 58.9 in March compared to the analyst consensus of 57.9. U.S. Manufacturing PMI report was also stronger than expected as Manufacturing PMI grew from 58.6 to 59.1 compared to analyst consensus of 59.
Today, foreign exchange market traders will focus on the job market data from the U.S. Analysts expect that the Non-Farm Payrolls report will indicate that the U.S. economy added 647,000 jobs in March 379,000 jobs in February. The unemployment Rate is projected to decline from 6.2% to 6%.
GBP/USD managed to get above the 20 EMA at 1.3830 and is moving towards the next resistance level, located at 1.3865. RSI is in the moderate territory, and there is plenty of room to gain additional momentum if the right catalysts emerge.
In case GBP/USD settles above the resistance at 1.3865, it will head towards the next resistance at 1.3900. A move above the resistance at 1.3900 will open the way to the resistance test at 1.3950. There are no material levels between 1.3900 and 1.3950, so this move may be fast.
On the support side, the previous resistance at the 20 EMA at 1.3830 will likely serve as the first support level for GBP/USD. The next support is located at the 50 EMA at 1.3820. In case GBP/USD declined below the 50 EMA, it will head towards the support at 1.3800. A successful test of the support at 1.3800 will push GBP/USD towards the support at 1.3780.
British Pound Pulls Back Against U.S. Dollar
Yesterday, the U.S. Dollar Index attempted to settle below the support at the 93 levels but failed to develop sufficient downside momentum. The U.S. Dollar Index managed to get back above the resistance at 93.20 and is moving towards the next resistance level at 93.40. In case the U.S. Dollar Index settles above this level, it will gain additional upside momentum, which will be bearish for GBP/USD
Foreign exchange market traders will have a chance to look at the final reading of the UK Manufacturing PMI report for March. Analysts expect that Manufacturing PMI increased from 55.1 to 57.9. In the U.S., Manufacturing PMI is projected to grow from 58.6 to 59.
Traders will also keep an eye on the U.S. government bond markets’ developments after U.S. President Joe Biden unveiled his $2 trillion infrastructure plan. At this point, Treasury yields are moving lower, but the U.S. dollar remains strong.