GBP/USD remains capped below 1.3600 on poor UK PMI

  • UK construction PMI disappoints.
  • DXY extends rebound.
  • The US ISM and Fed minutes – Up next.

Having failed to sustain above 1.36 handle on multiple occasions, the corrective slide in the GBP/USD pair now gains traction, following the release of downbeat UK construction PMI data.

GBP/USD: Brexit headlines shrugged-off?

Despite positive European equities, the spot erased most gains and now trades near daily lows of 1.3585 levels, as the sentiment soured after the UK construction PMI report showed a bigger-than-expected drop in the construction sector activity in December. The downbeat UK construction PMI print was widely expected, given yesterday’s deceleration in the manufacturing sector activity.

More so, the extension of the rebound seen in the US dollar against its main competitors also collaborates to the renewed downside in Cable. The USD index trades +0.12% near daily tops of 91.70 levels, with the bulls looking to regain the 92 mark.

Haresh Menghani, Analyst at FXStreet wrote: “Later during the NA session, the US ISM manufacturing PMI might also provide some short-term trading opportunities. The key focus, however, would be on the December FOMC meeting minutes, which would be watched for clues over a rate hike action in March and evaluated possibilities of 3 rate hikes in 2018.” 

GBP/USD Preferred Strategy

According to Jim Langlands at FX Charts: “The short-term momentum indicators are mixed but the dailies look constructive so, as with the Euro, buying dips currently seems to be the plan while keeping a tight stop in place.

Resistance

 

Support

 

1.3700

Minor

1.3550

Minor

1.3670

Minor

1.3520

Minor

1.3656

20 Sept high

1.3500

Minor

1.3620

Minor

1.3480

Minor

1.3599

Session high

1.3465

(23.6% of 1.3038/1.3599)

 

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