Key Highlights
- The British Pound recovery faced a strong selling interest near 1.3200-10 against the US Dollar.
- There is a key bearish trend line formed with resistance at 1.3180 on the 4-hours chart of GBP/USD.
- The UK Manufacturing PMI in June 2018 increased from the last reading of 54.3 to 54.4.
- Today in the US, the Factory Orders report for May 2018 will be released, which is expected to remain flat at 0% (MoM).
GBPUSD Technical Analysis
The British Pound started an upside correction from the 1.3050 swing low against the US Dollar. However, the GBP/USD pair faced a strong selling interest near 1.3200-10, resulting in a fresh decline.
Looking at the 4-hours chart, the pair formed a decent support at 1.3049 low and jumped above the 1.3100 resistance. There was also a break above the 50% Fib retracement level of the last decline from the 1.3315 high to 1.3049 low.
However, the upside move was capped by the 1.3200-10 resistance zone. Moreover, a key bearish trend line with current resistance at 1.3180 also prevented gains. Lastly, the 61.8% Fib retracement level of the last decline from the 1.3315 high to 1.3049 low stopped gains.
The pair started a new downside move and is currently trading well below 1.3200. On the downside, the last low of 1.3050 is a decent support. Below this, the pair may perhaps test the 1.3000 handle.
Recently in the UK, the Manufacturing Purchasing Managers Index (PMI) for June 2018 was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics. The market was looking for a decline from the last reading of 54.4 to 54.0.
However, the result was better as the PMI came in at 54.4, but the last reading was revised to 54.3. Overall, the result was positive, but it failed to help GBP/USD.
The US Dollar is once again gaining traction. Both EUR/USD and GBP/USD are showing signs of more declines, and USD/JPY is likely preparing for more gains above 111.15.
Economic Releases to Watch Today
- Euro Zone Retail Sales for May 2018 (YoY) – Forecast +1.4%, versus +1.7% previous.
- Euro Zone Retail Sales for May 2018 (MoM) – Forecast +0.1%, versus +0.1% previous.
- US Factory Orders May 2018 (MoM) – Forecast 0%, versus -0.8% previous.
