GBP/USD flirts with lows, just above mid-1.3600s on weaker UK PMIs


  • GBP/USD came under some selling pressure on Friday and eroded a part of the overnight gains.
  • The GBP was weighed down by indications of a prolonged lockdown and dismal UK macro data.
  • A pullback in the equity markets benefitted the safe-haven USD and contributed to the downfall.

The GBP/USD pair added to its intraday losses and refreshed daily lows, around mid-1.3600s in reaction to disappointing UK PMIs.

The pair witnessed some heavy selling on Friday – snapping three consecutive days of the winning streak – and eroded a major part of the overnight gains to the highest level since May 2018. The British pound was weighed down by indications of an extended lockdown in Britain, which means a further slowdown in the economic activity.

The sterling lost some additional ground following the release of downbeat UK Retail Sales figures, which recorded a modest rise of 0.4% in December. Adding to this, the UK PMI prints missed market expectations by a big margin, which further added to worries about the UK economic growth at the start of 2021 and exerted additional pressure on the GBP.

In fact, the flash version of the UK Manufacturing PMI dropped to 52.9 in January as against consensus estimates pointing to a fall to 54 from 57.5 previous. Meanwhile, the gauge for the services sector plunged further into the contraction territory and came in at 38.8 for the reported month, worse than 45 anticipated and 49.4 recorded in December.

Apart from this, a pullback in the equity markets provided a modest lift to the safe-haven US dollar. This was seen as another factor that contributed to the offered tone surrounding the GBP/USD pair and the intraday decline. It, however, remains to be seen if pair can attract some dip-buying or the pullback marks a near-term top, setting the stage for further weakness.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3678
Today Daily Change -0.0060
Today Daily Change % -0.44
Today daily open 1.3738
 
Trends
Daily SMA20 1.3605
Daily SMA50 1.3463
Daily SMA100 1.3216
Daily SMA200 1.2936
 
Levels
Previous Daily High 1.3746
Previous Daily Low 1.3652
Previous Weekly High 1.371
Previous Weekly Low 1.3451
Previous Monthly High 1.3686
Previous Monthly Low 1.3134
Daily Fibonacci 38.2% 1.371
Daily Fibonacci 61.8% 1.3688
Daily Pivot Point S1 1.3678
Daily Pivot Point S2 1.3618
Daily Pivot Point S3 1.3584
Daily Pivot Point R1 1.3772
Daily Pivot Point R2 1.3806
Daily Pivot Point R3 1.3866

 

 

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