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GBP/USD Video 17.08.20.
A Weak Start Of The Week For The U.S. Dollar
GBP/USD failed to settle above the resistance at 1.3110 but continues to trade close to this level as the U.S. Dollar Index tries to get below the nearest support level at 93.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, continues to trend down in absence of a new U.S. coronavirus aid package.
Republicans and Democrats failed to reach a consensus on the new coronavirus aid bill and won’t get back to negotiations until September.
Currently, the political focus has shifted to the funding of U.S. Postal Service and mail-in ballots in general, so there is no reason to expect any quick action on the stimulus front.
In the UK, the first important economic report will be released on Wednesday where traders will have a chance to evaluate inflation numbers for July.
In the U.S., the first market-moving reports, Initial Jobless Claims and Continuing Jobless Claims, are set to be published on Thursday, although traders will also keep a close eye on FOMC Minutes which will be released on Wednesday.
In this environment, GBP/USD dynamics will heavily depend on the fluctuations of U.S. government bond yields which have rallied in the recent days and provided some support to the U.S. dollar.
Technical Analysis
GBP/USD continues its attempts to settle above the nearest resistance level at 1.3110. GBP/USD has previously managed to get above 1.3110 but faced immediate selling pressure and returned back below this level.
In case GBP/USD manages to settle above 1.3110, it will gain upside momentum and head towards the next resistance level at 1.3200. GBP/USD has been consolidating near 1.3110 since the beginning of August so it will have good chances to get above the next resistance at 1.3200.
On the support side, the nearest support for GBP/USD is located at the 20 EMA at 1.3010. A move below the 20 EMA will mark the end of the current upside momentum but GBP/USD will need to settle below the next support level at 1.2980 to gain more downside momentum.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire