GBP/USD – Weak recovery ahead of UK services PMI

Omkar Godbole FXStreet Contributor

GBP/USD pair is having a hard time taking back losses as fears of ‘hard Brexit’ and spike in EUR/GBP overshadows positive UK economic data.

Eyes UK services PMI data

The single most important release today is the UK services PMI data which is expected to show the pace of expansion in the service sector slowed slightly in August. However, investors should note that fears of hard Brexit have overshadowed strong manufacturing and construction PMI releases earlier this week.

Meanwhile, talk of QE taper and the resulting action in the EUR/GBP cross could also influence the GBP/USD pair. Later in the day, the US ISM non-manufacturing figure could influence the pair as well.

GBP/USD Technical Levels

The spot was last seen trading around 1.2735 levels compared to previous day’s low of 1.2718. A breach of support at 1.27 (zero figure) could yield a test of 1.2590 (127.2% Fib expansion of July 2014 high – Apr 2015 low – June 2015 high). On the higher side, a break above 1.2789 (July 2016 low) would shift risk in favor of a re-test of 1.2813 (hourly 50-MA) and 1.2847 (5-DMA).

Sell 69%

Buy 31%

Avg Sell Price 1.2975

Avg Buy Price 1.3247

Liquidity Distribution

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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