GBP/USD outlook: Bulls struggle at 1.25 zone despite strong UK construction PMI data beat

Slobodan Drvenica Windsor Brokers

GBP/USD

Fresh strength probed above 1.2500 barrier and hit session high at 1.2509 but gains were so far short-lived as the pair pulled back to 1.2470 zone, despite upbeat UK June construction PMI data (June 55.3 vs 47 f/c, the highest since July 2018). Today's action marks the second probe through south-heading 20DMA (1.2493) which marks solid barrier. Repeated failure to break higher would keep the downside vulnerable, as momentum remains in negative territory and stochastic is about to reverse from overbought zone. We look for initial direction signals on break of pivotal points, provided by 100DMA (1.2447) and 20DMA (1.2494). Close below 100DMA would soften near-term tone and risk attack at lower pivots at 1.2430/23 (10DMA/Fibo 38.2% of 1.2251/1.2529), break of which would confirm reversal. Conversely, close above 20DMA would inflate bulls which would look for extension above 1.2530/30 (last Thursday's high/50% retracement of 1.2813/1.2251 descend) to signal continuation.

Res: 1.2494; 1.2509; 1.2532; 1.2566
Sup: 1.2466; 1.2447; 1.2430; 1.2415

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.256
2. R2 1.2527
3. R1 1.2504
PP 1.2471
1. S1 1.2449
2. S2 1.2416
3. S3 1.2393

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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