GBP/USD flirts with session lows, around 1.3630-20 region ahead of US data

A goodish pickup in the USD demand prompted fresh selling around GBP/USD on Wednesday.
The downside is likely to remain limited as the focus remains on the BoE meeting on Thursday.
Investors look forward to the US ADP report and ISM Services PMI for some trading impetus.

Haresh Menghani FXStreet

The GBP/USD pair maintained its offered tone through the mid-European session and dropped to fresh daily lows, around the 1.3620-15 region in the last hour.

Following the previous day's good two-way price swings, the pair came under some renewed selling pressure on Wednesday and was pressured by a goodish pickup in the US dollar demand. Expectations for a massive US fiscal stimulus continued pushing the US Treasury bond yields higher, which, in turn, extended some support to the greenback.

The British pound was further weighed down by the UK Services PMI, which was finalized at 39.5 for January. The reading was slightly better than 38.8 estimated earlier but pointed to the sharpest contraction in the sector since May 20. This added to worries about the potential economic fallout from coronavirus-induced lockdown measures.

Despite the negative factors, the downside seems cushioned as investors might refrain from placing aggressive bets ahead of the Bank of England meeting on Thursday. This makes it prudent to wait for some follow-through selling below the 1.3610-1.3600 region before traders start positioning for any further near-term depreciating move.

In the meantime, Wednesday's release of the ADP report on the US private-sector employment and the US ISM Services PMI will be looked upon for some impetus. This, along with the broader market risk sentiment, might influence the USD price dynamics and assist traders to grab short-term opportunities around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price	1.3628
Today Daily Change	-0.0032
Today Daily Change %	-0.23
Today daily open	1.366

Trends
Daily SMA20	1.3649
Daily SMA50	1.353
Daily SMA100	1.3274
Daily SMA200	1.2988

Levels
Previous Daily High	1.371
Previous Daily Low	1.3611
Previous Weekly High	1.3759
Previous Weekly Low	1.361
Previous Monthly High	1.3759
Previous Monthly Low	1.3451
Daily Fibonacci 38.2%	1.3649
Daily Fibonacci 61.8%	1.3672
Daily Pivot Point S1	1.3611
Daily Pivot Point S2	1.3562
Daily Pivot Point S3	1.3512
Daily Pivot Point R1	1.371
Daily Pivot Point R2	1.376
Daily Pivot Point R3	1.3809

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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