GBP/USD climbs above 1.2970 as USD selloff intensifies after PMI data


  • Economic activity in US private sector contracts in February.
  • US Dollar Index erases majority of weekly gains.
  • Upbeat Manufacturing PMI from UK helps GBP gather strength.

The GBP/USD pair extended its daily recovery during the American session on Friday and touched a fresh daily high of 1.2978 as the USD came under heavy selling pressure on disappointing PMI data. As of writing, the pair was up 0.7% on the day at 1.2972. Despite this rebound, the pair remains on track to post weekly losses. 

PMI data impact FX market on Friday

Earlier in the day, the IHS Markit reported that the Manufacturing PMI in the UK rose to 51.9 in February (preliminary) from 50 in January to show an expansion in the sector's business activity at a modest pace. The GBP capitalized on the data and started to gather strength against its major rivals.

In the second half of the day, the IHS Markit's PMI report for the US revealed that the economic activity in the private sector in February contracted with the Composite PMI slumping to its lowest reading in 76 months at 49.6 following January's reading of 53.3. Moreover, the Manufacturing PMI and the Services PMI in the US fell to 50.8 and 49.4, respectively.

Pressured by the disappointing data, the US Dollar Index erased a large portion of its weekly gains in a quick fashion and was last seen down 0.57% on the day at 99.32.

Assessing the data,  "the deterioration in was in part linked to the coronavirus outbreak," said Chris Williamson, Chief Business Economist at IHS Markit. "However, companies also reported increased caution in respect to spending due to worries about a wider economic slowdown and uncertainty ahead of the presidential election later this year. 

Technical levels to watch for

GBP/USD

Overview
Today last price 1.2969
Today Daily Change 0.0087
Today Daily Change % 0.68
Today daily open 1.2882
 
Trends
Daily SMA20 1.3001
Daily SMA50 1.3053
Daily SMA100 1.2955
Daily SMA200 1.2694
 
Levels
Previous Daily High 1.293
Previous Daily Low 1.2849
Previous Weekly High 1.307
Previous Weekly Low 1.2872
Previous Monthly High 1.3281
Previous Monthly Low 1.2954
Daily Fibonacci 38.2% 1.288
Daily Fibonacci 61.8% 1.2899
Daily Pivot Point S1 1.2844
Daily Pivot Point S2 1.2806
Daily Pivot Point S3 1.2763
Daily Pivot Point R1 1.2925
Daily Pivot Point R2 1.2968
Daily Pivot Point R3 1.3006

 

 

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