GBP/USD trades above the rising trend line (red) hurdle for a brief moment in the NY session before trimming gains to end the day on a positive note at 1.4262 levels. The move lower form the high of 1.4322 levels was largely due to hawkish comments from Fed’s Rosengren. The pair is now trading on a weaker note around 1.4245 levels.
Eyes UK services PMI figure
Services PMI is seen ticking higher at 53.5 in March from Feb figure of 52.7. Service sector is the most dominant sector of the economy, accounting for almost 80% of the economy. A higher-than-expected services PMI figure could help the pair secure a bullish break above 1.4307 (rising trend line hurdle).
On the other hand, the pair could breach another rising trend line support at 1.4154 if the services PMI prints lower than the previous month’s figure of 52.7. Anything between expected figure – 53.7 and previous figure – 52.7 may result in a lukewarm market reaction.
Moreover, a weak figure could provide BOE another reason to delay its rate hike. Interest rate markets already see a higher possibility of a rate cut rather than a rate hike this year.
Technicals – watch out for rebound from 1.4252
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GBP’s failure to take out rising trend line (red) hurdle on closing basis yesterday has kept the doors open for bears to make their presence felt.
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Still, a rebound from 1.4252 (hourly 50-MA + hourly 200-MA + 50% of 1.4668-1.3835) would shift risk in favor of a rise to 1.4307 – 1.4313 (hourly 100-MA) beyond which 1.4330 (23.6% of 1.5930-1.3835) could stall the rally.
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On the lower side, bears need to secure a daily close below 1.4154 to crowd out bulls and trigger a further drop to 1.4079 (Jan 21 low). When viewed on a larger scheme of things, the pair appears directionless and thus indicators are not pointing to a specific trend ahead.
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