Key Points
- The British Pound made a nice upside move this past week before finding resistance near 1.3030 against the US Dollar.
- The GBPUSD pair traded lower and broke a major bullish trend line with support at 1.2995 on the hourly chart.
- Today in the UK, the PMI Construction for June 2017 was released by the Chartered Institute of Purchasing & Supply and Markit Economics.
- The outcome was lower than the forecast, as there was a decline in the PMI from the last reading of 56 to 54.8.
GBPUSD Technical Analysis
The British Pound gained heavy bids this past week and traded above the 1.3000-10 levels against the US Dollar. The GBPUSD pair traded as high as 1.3030 where it faced a tough resistance, and as a result, there was a downside reaction.
The pair declined and broke the 1.3000 support along with the 21 hourly simple moving average. There was also a break below a major bullish trend line with support at 1.2995 on the hourly chart.
The pair is now below the 23.6% Fib retracement level of the last wave from the 1.2796 low to 1.3031 high. So, there is a chance of further declines may be towards the 50% Fib level at 1.2912. Any further declines would call for a test of 1.2880.
UK Construction PMI
Today in the UK, the PMI Construction for June 2017 was released by the Chartered Institute of Purchasing & Supply and Markit Economics. The market was positioned for a minor decline in the PMI from 56 to 55 in June 2017.
The actual result was lower than the forecast, as there was a decline in the PMI from the last reading of 56 to 54.8. Commenting on the same, the Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI, Tim Moore, stated “The construction sector experienced a growth slowdown in June, largely reflecting weaker rises in commercial building and civil engineering activity”.
Overall, the GBPUSD may correct further and test the 1.2880-50 support area before moving back higher.
