Technical Analysis

Sterling extends drop after manufacturing PMI knowledge launch disappoints

GBP/USD strikes to a low of 1.3066, EUR/GBP rises to a excessive of zero.8775

GBP/USD H1 01-02

It is troubling instances for the pound as not solely did the manufacturing PMI print earlier upset, it ought to have been a lot weaker if not for document stockpiling because of Brexit uncertainty.

Cable is now slipping to a low of 1.3066 on the day and is nearing a check of help close to 1.3060-62 earlier than bids round 1.3050 will come into play. On the identical time, weak spot in sterling can also be serving to to carry the euro with EUR/GBP rising to zero.8775 at the moment.

Positive, that is simply the manufacturing studying and the UK financial system depends on the companies sector extra however the response right here is extra about sentiment. With Markit highlighting issues such that there’s a “actual threat of a producing sector recession”, it is not the type of phrases that merchants/buyers wish to hear.

For now, a breach under the 200-hour MA (blue line) in cable will see sellers take management however I might count on the world round 1.3050-60 to no less than maintain a drop forward of the US payrolls knowledge later. Nevertheless, if that breaks, it is a slippery slope in direction of 1.3000 with minor help seen round 1.3025-30 and the 200-day MA @ 1.3039 simply earlier than that.

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