GBP/USD struggles to find direction above 1.2300 ahead of UK PMI


  • GBP/USD registers modest losses following Wednesday’s upbeat performance.
  • Tory leaders anticipate to be “at the peak” of the outbreak, are criticized for mishandling the coronavirus,
  • UK PMIs to portray downbeat scenario but $3.2 billion worth of bets say Pound will go up.
  • US Jobless Claims, Markit PMI and virus updates are important too.

GBP/USD drops to 1.2325, down 0.07% on a day, while heading into the London open on Thursday. A lack of major catalysts held the Cable pair tightly during Asia. Though, the key UK PMI and US Jobless Claims, coupled with activity numbers, will offer an active session ahead.

Tories under attack….

On Wednesday, the cabinet members getting their first chance to criticize the PM Boris Johnson and Company’s mishandling of the UK’s coronavirus (COVID-19) crisis. Not only shortages of medical supplies and a surging death toll beyond 18,100 but fewer nurses due to the Brexit were also being targeted on the standing leader Dominic Raab.

In response, the deputized PM defied the claims and marked nearness to the peak of the outbreak, together with the Health Secretary Matt Hancock, while also suggesting the start of the human trials over 300,000 people in a year.

Elsewhere, City A.M. marked a divide between the Tory negotiators when it comes to the Brexit. “Civil servants are increasingly frustrated that the government refuses to countenance the idea of an extension, while political appointees are keen to press home the UK’s departure,” said the news.

On the positive side, UK Metro quoted Downing Street as saying that the PM will be holding his regular audience with the Queen via telephone later this week, even though his deputy Dominic Raab is officially leading the country in his absence.

On the US side, President Trump kept pushing for the economic restart while threatening Iran and turning down the fears of a further outbreak.

Amid all these, the US 10-year Treasury yields decline to 0.60% with stocks in Asia trimming the early-day gains.

Moving on, the preliminary readings of March month’s Markit PMIs become the key to determine the near-term direction of the Cable, the reason to blame is the virus outbreak during the period. FXStreet’s Yohay Elam says, “If the data comes out below expectations, pound/dollar has room to fall as it would reveal growing pessimism among decision-makers. It would also show that the current situation is worse than previously perceived. If the figures meet expectations, they would still de gloomy. Sterling may hold up in its range in the immediate aftermath but fall afterward. Ongoing weak figures may take their toll.”

While the forecasts suggest downbeat readings of the key Manufacturing and Services PMI figures, respectively to 42 and 29 versus 47.8 and 34.5, Reuters mentions, “there is still a net $3.2 billion worth of bets that the pound will go up, but that number has been falling for the last six weeks.

Following the UK data, a heavy economic docket from the US will also be watched while pandemic details could offer intermediate clues.

Technical analysis

A seven-day-old falling trendline near 1.2395 restricts the pair’s short-term upside whereas an upward sloping trend line since March 27, around 1.2210, seems to be the immediate support.

Additional important levels

Overview
Today last price 1.2326
Today Daily Change -8 pips
Today Daily Change % -0.06%
Today daily open 1.2334
 
Trends
Daily SMA20 1.2403
Daily SMA50 1.2517
Daily SMA100 1.2796
Daily SMA200 1.2655
 
Levels
Previous Daily High 1.2386
Previous Daily Low 1.2275
Previous Weekly High 1.2648
Previous Weekly Low 1.2407
Previous Monthly High 1.3201
Previous Monthly Low 1.1412
Daily Fibonacci 38.2% 1.2344
Daily Fibonacci 61.8% 1.2317
Daily Pivot Point S1 1.2277
Daily Pivot Point S2 1.222
Daily Pivot Point S3 1.2166
Daily Pivot Point R1 1.2388
Daily Pivot Point R2 1.2443
Daily Pivot Point R3 1.25

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD battles with 1.1700 as the market mood turns sour

Poor German data and renewed concerns about a default of the Chinese Evergrande property giant undermined investors’ sentiment, pushing them into the dollar’s safety.

EUR/USD News

GBP/USD accelerates its slump, trades around 1.3650

GBP/USD is under strong selling pressure, trimming most of its post-BOE gains. Concerns about the global financial health and slow moves towards tapering weigh on markets.

GBP/USD News

XAU/USD hangs near multi-week lows, around $1,745 ahead of Powell

Gold struggled to capitalize on its attempted intraday recovery move. Hawkish Fed/BoE, rising bond yields acted as a headwind for the metal. Resurgent USD demand exerted additional pressure on the commodity.

Gold News

PBoC imposes ban on crypto trading as it fosters ‘illegal financial activity’

PBoC bans crypto trading activities and a plethora of associated services, labeling it “illegal.” Overseas cryptocurrency exchanges providing services to Chinese residents will be investigated in accordance with the law. 

Read more

Evergrande, VIX and yields make for choppy day ahead

Equity markets remain focused on Evergrande as rumours of a possible default on overseas debt swirl. The market appears to be on the hunt for negative news, which leads us to conclude that stocks are going lower in the short term.

Read more

Forex MAJORS

Cryptocurrencies

Signatures