The GBP/USD pair is seen on a steady recovery path so far this session, with the bulls now trying hard to regain 1.25 handle amid moderate risk-aversion.
Cable peeks into the green amid subdued treasury yields, in the wake of lack-luster US manufacturing PMI reports released a day before. However, the recovery gains appear capped amid negative equities, as risk-off extends into Asia.
Moreover, the sentiment around the pound remains somewhat undermined, as yesterday’s poor UK manufacturing PMI report continues to weigh. The UK manufacturing PMI for March arrived at 54.2 versus 55.1 expectations and 54.6 last.
Focus now shifts towards the UK construction PMI data due later in the European session for fresh impetus on the spot. Also, the US trade and factory orders data will be closely eyed for next direction on the buck.
GBP/USD Levels to consider
Valeria Bednarik, Chief Analyst at FXStreet notes, “The 4 hours chart supports additional declines, as the price is currently developing below its 20 SMA, whilst the Momentum indicator is crossing below the 100 level, and the RSI heading south around 46. Still the pair has a major support around 1.2430, which stands for the 38.2% retracement of the January rally. A break below this last should expose March 29th low of 1.2375, en route to 1.2330 a strong static support. The upside should remain capped by selling interest around 1.2540/60 for the bearish trend to remain in place.”
Currently, GBP/USD is trading at 1.2474, down -0.60% on the day, having posted a daily high at 1.2557 and low at 1.2466.
GBP/USD has been hit hard today, starting overnight on the back of UK Markit manufacturing PMI for March that sent sterling traders offloading cable below the 1.25 handle. The data arrived in at 54.2 for a four-month low. This was vs. the prior 56.2 and missing expectations of 55.1. The ISM manufacturing in the US was positive although markit manufacturing PMI was missing expectations by 0.2%. The key events for the week http://humanrightsfilmnetwork.org/cialis will come in the form of the FOMC minutes and the nonfarm payrolls at the end of the week:
To the downside, there is the major 1.2430 Fibonacci support and Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart supports additional declines, as the price is currently developing below its 20 SMA, whilst the Momentum indicator is crossing below the 100 level, and the RSI heading south around 46. “The upside should remain capped by selling interest around 1.2540/60 for the bearish trend to remain in place.”