GBP/USD: Bears await fresh clues heading into UK manufacturing PMI

GBP/USD trades near 1.3260 before London open on Friday.
The pair has been soft recently as upbeat US GDP and statements from the Fed Chair pleased USD buyers.
Monthly manufacturing PMI from the UK and the US can give near-term direction to the pair traders.

Anil Panchal FXStreet

The GBP/USD pair remains little changed around 1.3260 heading towards European session on Friday. The pair weakened recently as better than forecast US GDP and the latest comments from the Fed Chair strengthened the US Dollar (USD). Though, investors await additional signals to confirm further downside. In doing so, February month manufacturing PMI from the UK and the US can become the first to be observed.

The US gross domestic product (GDP) increased to 2.6% versus 2.3% market expectations during the fourth quarter of 2018 on Thursday. During early Friday in Asia, Federal Reserve Chairman Jerome Powell spoke at the Citizens Budget Commission Awards Dinner, New York. The Fed Chair maintained his call for patience concerning the future monetary policy actions but lauded economic growth.

While the British parliament has been witnessing drama over the Brexit off-late, things are a bit quiet in last two days after the UK PM Theresa May calmed no-deal Brexit fears down. Recently, the opposition Labour party proposed another plan for Brexit that got rejected. However, Jeremy Corbyn & Co. isn’t taking rest and may propose a new referendum soon.

At the economic calendar, February month readings of the UK Markit manufacturing purchasing manager’s index (PMI) and the US ISM Manufacturing PMI should gain immediate market attention. Among them, the British Markit manufacturing PMI will be the first one to appear with forecast favoring 52.0 figure against 52.8 prior. Further, the US ISM manufacturing PMI may soften to 55.5 from 56.6 noted in the month of January.

Additionally, development at the US-China trade deal is also an important catalyst to observe. The US policymakers have been flashing mixed signals for the success of recent trade negotiations and hence the actual outcome of the Trump-Xi meet will be crucial to follow.

GBP/USD Technical Analysis

GBP/USD can revisit 1.3230 and 1.3200 on the extended declines under the recent low of 1.3250 whereas 1.3110 could become sellers’ favorite afterward.

In order to confirm the pair’s strength to target 1.3365, buyers need to conquer 1.3280 and 1.3300 resistances.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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