GBP/USD Forecast: limited declines post soft-UK data
|- UK Construction PMI misses expectations, weighing on Pound.
- USD gains limited ahead of FOMC Minutes and ISM PMI.
The GBP/USD pair has been hovering around the 1.3600 level pretty much since late Tuesday, peaking at 1.3612 during Asian trading hours, its highest since last September, when the pair posted a multi-month high of 1.3653. The release of the December UK Construction PMI weighed on Pound as the index resulted at 52.2, below the expected 52.5 and the previous 53.1, but the pair retreated just marginally, falling to the current 1.3580 region. However, absent demand for the greenback keeps the downward potential limited for the pair.
The FX board is quiet amid a scarce macroeconomic calendar in Europe and key releases in the US later in the day, including the latest FOMC Minutes and the ISM Manufacturing PMI.
The 4 hours chart for the pair shows that the RSI indicator is barely retreating within overbought territory, while the Momentum indicator also pulls back from its highs, but the downward momentum is well limited, while the price keeps holding far above a bullish 20 SMA, currently around 1.3520, a possible bearish target if the 1.3560 support gives up. Beyond the mentioned daily high, the pair will likely extend its advance up to the 1.3650 price zone, en route to the 1.3700 level.
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