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GBP/USD testing 9-month lows near 1.4640, PMI eyed

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 6, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - The US dollar is seen picking-up significant strength across the board, now pushing GBP/USD closer towards nine-month lows near 1.4635 levels.

    GBP/USD drops 40 pips so far

    The GBP/USD pair trades -0.18% at 1.4644, within a striking distance of fresh multi-month lows struck at 1.4636 on Tuesday. Having failed to take-out the strong resistance near hourly 20-SMA at 1.4665 the major came under renewed selling pressure ahead of the European opening bells, as the US dollar jumped back on the bids against its six major competitors.

    Moreover, markets remain cautious ahead of the services PMI report from the UK docket, which is likely to show in show a drop in the services sector activity last month. The UK services PMI in December is seen ticking down to 55.8 from the 55.9 booked in the previous cycle. On Tuesday, the UK construction PMI rebounded to 57.8 in Dec against 55.3 previous.

    Besides, the cable will be also influenced by a host of upcoming US economic events, including the ADP jobs report, trade balance and ISM services PMI, followed by FOMC minutes.

    GBP/USD Levels to consider

    The pair has an immediate resistance at 1.4700/04 (round number/ 5-DMA), above which 1.4747/69 (1h 100-SMA/ 10-DMA) would be tested. On the flip side, support is seen at 1.4600 (round number) below which it could extend losses to 1.4563 (April 2015 Low).
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