GBP/USD seeking 1.34 ahead of UK's PMI figures for Monday
- Sterling on the move upwards as markets continue to bid up on risk appetite.
- UK PMIs are expected to contract for May, but a better-than-expected reading will keep the technical correction on-track.
The GBP/USD is lifting in risk-on markets to kick off the new trading week, and the pair is trading into 1.3375 ahead of Monday's London market session that brings the UK's Construction PMI figures for May.
The Sterling caught some lift on Friday following the US NFP numbers that came in better than expected, sending market sentiment higher to cap off the trading week, and markets are pushing ahead with risk appetite on the forward swing despite ongoing trade tensions surrounding the US.
Monday sees the UK Construction PMI for the month of May at 08:30 GMT, which is expected to contract to 49.7, from the previous reading of 52.5. Disappointing economic data knocked the GBP off of highs beginning in April near when the GBP/USD was trading into 1.4375, and the Bank of England (BoE) was forced to walk back a highly-anticipated interest rate increase in early May. The GBP heads into the PMI reading after marking in a technical correction from last week's low near 1.3200, and a worse-than-expected contraction could easily send the Pound back into new lows, while a better-than-expected reading will help to keep the pair aloft as bulls try to push for a reversal.
GBP/USD levels to watch
Technical indicators for Daily candles are finally beginning to rollover into bullish signals, and as FXStreet Chief Analyst Valeria Bednarik noted, "in the daily chart, the RSI has left extreme oversold territory ever since, heading modestly higher around 35. In the same chart, the Momentum indicator remains directionless below its 100 level, while the price remains well below its 20 DMA, this last at around 1.3420. In the 4 hours chart, the pair advanced above its 20 SMA for the first time in over the month, with the indicator losing its bearish strength. The Momentum lacks directional strength but holds within positive territory, while the RSI aims north around 59, leaning the scale to the upside without confirming a bottom has been established."
Support levels: 1.3290 1.3245 1.3200
Resistance levels: 1.3375 1.3420 1.3460
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
