GBP/USD attempting gains after 500-pip fall

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 29, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    The GBP/USD pair is attempting gains after heightened Brexit fears and strong US data led to a 533 pip fall last week.

    Focus on Economic data

    The focus could be back on economic data releases this week. UK manufacturing and service sector PMI due later this week are important from the UK side of the story. Meanwhile, US labor market indicators – ISM manufacturing and non-manufacturing employment sub index, ADP report, jobless claims and Friday’s non-farm payrolls report, could affect Fed rate hike bets.

    Moreover, experts say Brexit sell-off may be done for now; given the currency pair is oversold. Hence, the pair could respond more to economic data releases. As for today, UK consumer credit could trigger moves in Cable.

    GBP/USD Technical Levels

    The spot currently trades around 1.3875. The immediate resistance is seen at 1.3924-1.3927 (76.4% Fibo expansion of July 2014 high-April 2015 low-June 2015 high + hourly 50-MA), above which the pair could make a run at 5-DMA level of 1.40. On the other hand, a break below 1.3841 (daily low) could see the spot test psychological support at 1.38. However, below 1.3841 a major support on the chat is directly seen at 1.3654 (Mar 2009 low).
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