GBP/USD: Recovery to gain traction above 1.3530, awaits UK PMI

DXY consolidates below 92 handle.
UK services PMI to boost the recovery?

Dhwani Mehta FXStreet

Fresh bids emerged near 1.3500 levels, which prompted a tepid recovery in GBP/USD during the Asian trades, with the bulls now look to regain the 1.3530 barrier heading into Europe.

GBP/USD: Brexit headlines shrugged-off?

The spot accelerated downbeat UK construction PMI-led declines and tested the 1.35 handle, as broad-based USD recovery gained traction on the release of solid US ISM manufacturing PMI and once again after the FOMC minutes turned out more hawkish, indicating the Fed is still poised to hike interest rates several times this year.

Over the last hours, the recovery in the greenback appears to have faltered, aiding the renewed upside seen in Cable. Moreover, the risk-on rally seen in the Asian equities amid better Chinese services PMI data and higher oil prices also lifted the sentiment around the risk currency, the GBP.

However, markets do not rule a fresh round of selling below 1.3500 levels should the UK services PMI data disappoint, especially after both the UK manufacturing PMI and construction PMI data showed dismal results.

Valeria Bednarik, Chief Analyst at FXStreet noted: “The UK will release its November money figures this Thursday, alongside with the December Markit Services PMI. This last is expected at 53.8 and will have a larger influence on prices that money data, as another miss will likely send the pair to fresh weekly lows.”

GBP/USD Preferred Strategy

Bednarik added: “The 4 hours chart shows that it is poised to extend its decline on a break below the mentioned daily low, as its developing below its 20 SMA that anyway maintains a bullish slope, while technical indicators are breaking through their mid-lines, with limited bearish strength. A recovery beyond 1.3560, on the other hand, will take off the downward pressure, favoring a recovery toward the 1.3650 region. Support levels: 1.3495 1.3450 1.3410. Resistance levels: 1.3560 1.3610 1.3655.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD stays on the back foot near 1.3570

GBP/USD keeps the weekly decline on Friday, slipping back to the 1.3570 zone amid a decent pick-up in the Greenback. In the meantime, Cable remains under pressure ahead of key releases from the US labour market and Chair Warsh’s speech at the Jackson Hole Symposium.

EUR/USD flirts with 1.1650; focus on NFP, Warsh

EUR/USD navigates the lower end of its weekly range near the 1.1650 region on Friday. The pair’s slightly offered stance follows humble gains in the US Dollar and steady caution ahead of the NFP Annual Revision and the speech by Chair Warsh at the Jackson Hole Symposium.

Gold treads water around $4,600 ahead of Warsh, Payrolls

Gold trades in a vacillating fashion around the key $4,600 region per troy ounce at the end of the week. The precious metal’s lack of direction comes in response to the generalised caution prior to the release of the US NFP Annual Revision, while the speech by Chair Warsh at the Jackson Hole Symposium also keeps sentiment on edge.

Crypto Today: Bitcoin, Ethereum, XRP rally loses steam despite steady ETF inflows

Bitcoin is back below $80,000 at the time of writing on Friday, after a second attempt at breaking resistance between $81,000 and $82,000. Meanwhile, Ethereum and Ripple mirror Bitcoin’s cooling trend, with ETH sliding to $2,500 and XRP falling toward $1.40 support.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September. The Jackson Hole symposium, held from August 27 to 29, has the official theme “Financial Innovation: Implications for Payments and Policy.”

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.