GBP/USD analysis: bearish potential increased after latest developments

GBP/USD Current price: 1.3508

  • Pound hit by Construction PMI, services index to be key this Thursday.
  • GBP/USD decline could extend on renewed selling interest below 1.3500.

The GBP/USD pair trimmed all of its Tuesday's gains and entered negative territory for the week, hitting a daily low of 1.3494 early US session, amid combined  strong US data with a poor UK macroeconomic reading. In the UK, the December Markit Construction PMI came below expected, printing 52.2 from previous 53.1, also missing expectations of 52.5, as a robust raise in residential building was offset by falling work on commercial projects and stagnating civil engineering output, according to the official release. The UK will release its November money figures this Thursday, alongside with the December Markit Services PMI. This last is expected at 53.8 and will have a larger influence on prices that money data, as another miss will likely send the pair to fresh weekly lows. The pair is a few pips above the 1.3500 figure and the 4 hours chart shows that it is poised to extend its decline on a break below the mentioned daily low, as its developing below its 20 SMA that anyway maintains a bullish slope, while technical indicators are breaking through their mid-lines, with limited bearish strength. A recovery beyond 1.3560, on the other hand, will take off the downward pressure, favoring a recovery toward the 1.3650 region.

Support levels: 1.3495 1.3450 1.3410

Resistance levels: 1.3560 1.3610 1.3655

View Live Chart for the GBP/USD

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