Key Points
- The British Pound traded higher recently against the US Dollar, but found sellers near 1.2270.
- There is a crucial ascending channel pattern formed on the hourly chart, which acted as a resistance recently.
- Today in the UK, the Manufacturing Purchasing Managers Index (PMI) was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics.
- The result was a bit lower, as there was a decline from the last revised reading of 55.5 to 54.3 in Oct 2016.
GBPUSD Technical Analysis
The British Pound climbed recently to trade near 1.2279 against the US dollar, but it found sellers. There is a crucial ascending channel pattern formed on the hourly chart of GBPUSD, acting as a catalyst for the recent moves, including failure near 1.2280.
The pair is currently trading lower, and traded below the 23.6% Fib retracement level of the last wave from the 1.2143 low to 1.2279 high.
On the downside, the 50% Fib retracement level of the last wave from the 1.2143 low to 1.2279 high and the 21 hourly SMA are major supports at 1.2210-00.
UK Manufacturing Purchasing Managers Index (PMI)
Today in the UK, the Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics.
The market was expecting a decline from the last reading to 54.3 in in Oct 2016. However, the result was on the lower side, as there was a decline to 54.3. Commenting on the report, the Senior Economist at IHS Markit, Rob Dobson, stated “The UK manufacturing sector remained on a firm footing in October and should return to growth in the fourth quarter. Despite slowing from September’s highs, growth of output and new orders continued to defy expectations, rising at marked rates and supporting the fastest job creation in a year”.
Overall, the British Pound may correct lower, but likely to find support on the downside at 1.2210-00.
