GBP/USD Price Analysis: Stays defensive above 50-DMA ahead of US/UK PMI data
- GBP/USD struggles to defend the bounce off short-term moving average ahead of US, UK PMI numbers for May.
- Bearish MACD signals, steady RSI suggests further downside toward February’s high.
- Ascending support line from October 2022 appears a tough nut to crack for Pound Sterling bears.
- Cable buyers need validation from seven-week-old previous support line.
GBP/USD aptly portrays the pre-data anxiety as it dribbles around 1.2430 during early Tuesday morning in London. In doing so, the Cable pair marks the traders’ cautious mood ahead of the first readings of the UK’s S&P Global/CIPS PMI for May, as well as the US S&P Global PMIs for the said month.
Also read: GBP/USD recovers to 1.2450 amid US debt ceiling struggle, US/UK PMIs eyed
It’s worth noting that the quote’s downside break of a nearly two-month-old ascending trend line, marked in the last week, joins the bearish MACD signals to keep the GBP/USD sellers hopeful.
However, the steady RSI (14) line near the 50.0 level and the 50-DMA support surrounding 1.2420, quickly followed by the 1.2400 round figures, challenge the GBP/USD bears.
Following that, a quick fall towards February’s high of near 1.2270 can’t be ruled out. Though, an upward-sloping support line from October 2022, close to 1.2255 by the press time, appears a tough nut to crack for the bears.
Meanwhile, the GBP/USD pair’s recovery needs to cross the support-turned-resistance line of around 1.2500, to recall the Pound Sterling buyers.
Should the Cable price remains firmer past 1.2500, backed by upbeat UK data, the odds of witnessing a run-up toward the yearly high of 1.2680 can’t be ruled out.
GBP/USD: Daily chart
Trend: Further downside expected
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.
