GBP/USD Sinks as Brexit Final Touches Approaches, Awaiting UK PMI
Once again, GBP/USD dips to 1.2260 20-Jan-Fresh-lows with a reminder of Brexit bearish levels. The pair is downtrend for fifth consecutive session through this week due to the following factors.
1- Strong U.S. dollar performance after Fed Rate hikes has increased from 35% on Tuesday to 69% on Wednesday (CNBC). U.S. index peeked yesterday to 101.97, highest levels since Feb.
2- PM Theresa May mentioned recently that papers ( Article 50 ) for final divorce from EU are ready and the green light is granted for a release. (Reuters).
3- Yesterday, UK negative Manufacturing PMI at 54.8 while forecasts were 55.9, added more negative mood for sterling future and what about to come.
These are the elements that created the dark cocktail for Sterling and fears grow further more, along with it uncertainty evolves around GBP/USD coming future. The pair has a chance to claim some dignity today at UK releases local construction PMI which will either dig a deeper hole or the pair will make an upward temporary correction.
Fundamentals :
1- GBP Construction PMI today at 9:30 AM GMT.
2- USD Unemployment Rate today at 1:30 PM GMT.
3- USD - Yellen Speech tomorrow at 6:00 PM GMT.
Technical :
Trend : Bearish
Daily Pp 1.2326
Resistance levels : R1 1.2329, R2 1.2383, R3 1.2469
Support levels : S1 1.2257, S2 1.2208, S3 1.2134
Remark : Look forward for UK and U.S. data today. The market is negative due to strong US Index and Yellen Speech tomorrow could create additional gains for USD. A penetration for S1 level will create further congestion with increase selloffs and wash towards S2 level. Closing above R2 level is needed for short-term correction and above R3 level, the pair to be considered bullish.
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