GBP/USD extends UK PMI-led downfall, slips below mid-1.4000s
• UK construction PMI slips into contraction territory and triggers GBP weakness.
• US-China trade tensions weigh on the USD and help limit further downside.
• Traders now eye US ADP report and ISM PMI for some fresh impetus.
The GBP/USD pair extended disappointing UK data-led retracement slide from the 1.4100 neighborhood and has now dropped to a fresh session low.
The British Pound started losing ground after data released on Wednesday showed activity in the UK construction sector unexpected dropped into contraction territory, with the Markit UK construction PMI coming in at 47.0 for March.
Currently trading around 1.4040 area, the pair now seems to have snapped three consecutive days of winning streak and has also reversed previous session's modest gains.
Meanwhile, some renewed US Dollar weakness, triggered by escalating US-China trade conflicts did little to lend any support, albeit could help limit any deeper fall, at least for the time being.
Focus now shifts to the US economic docket, featuring the release of ADP report on private sector employment, which along with the ISM non-manufacturing PMI might provide some fresh trading impetus during the early NA session.
Technical levels to watch
Any follow-through weakness below the 1.4025-20 immediate support is likely to drag the pair towards testing 50-day SMA support near the 1.3990 region en-route 1.3965-60 horizontal support.
On the upside, any up-move back above 1.4060 level might continue to confront some fresh supply near the 1.4100 handle and a subsequent up-move might now be capped near the 1.4120-25 support turned resistance.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
