GBP/USD reverses a knee-jerk to 1.3910 post-UK PMI

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    A sudden bout of selling interest gripped the GBP following the release of UK manufacturing PMI, knocking-off GBP/USD almost 60-pips to 5-DMA support at 1.3910.

    GBP/USD fresh bids emerge at 5-DMA

    The GBP/USD pair trades 0.05% higher at 1.3926, quickly retreating from fresh session lows struck at 1.3910 last minutes. The cable found fresh bids near 5-DMA and moved-off lows, as markets assess the latest poor manufacturing sector activity report from the UK.

    The UK’s manufacturing sector gauge, manufacturing PMI, decelerated more than expected to 50.8 in February, down from January's 3-month high of 52.9 and dropped to the lowest in 34 months.

    The cable remains better bid and appears to shrug-off the economic news as the risk-on tone in the markets continue to keep the demand for higher-yielding currencies such as the GBP intact. Looking ahead, the focus now shifts towards the US ISM and Markit’s manufacturing PMI reports for next direction on the major.

    GBP/USD Levels to consider

    The pair has an immediate resistance at 1.3980/1.4000 (daily high/ round number), above which 1.4033 (10-DMA) would be tested. On the flip side, support is seen at 1.3910 (5-DMA), below that at 1.3852 (Feb 26 Low).
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