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Sterling Lower After UK Manufacturing PMI Data – Breakout Under Recent Range Lows

Sterling Lower After UK Manufacturing PMI Data – Breakout Under Recent Range Lows

Sterling Lower After UK Manufacturing PMI Data – Breakout Under Recent Range Lows

  • GBPUSD (pound/dollar) has seen a continuation of the prevailing bearish trend, after the UK Manufacturing PMI data released today revealed a return to contraction of the UK manufacturing sector in February.
  • The Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) dropped to 47.9 from a revised 50.5 reading in January, significantly out of sync with previous forecasts of a potential rise to 51.0. 
  • This report revealed that “output and new orders both registered falls since January” with “tough market conditions, both at home and abroad, weighing on demand”.
  • Our previous update highlighted that demand for sterling was still limited,with the recent range highs coinciding with the 61.8% Fibonacci retrace of the last leg lower capping the GBPUSD price action in the near term.
  • Cable has now dropped over 160 pips in the last hour, and is trading around 1.5039, after hitting a low of 1.5011 on significant volatility.  The daily range is currently 184% of the 60-day ADR (average daily range).
  • The 1.5000 round number area is now seen as key in the near term with a weekly close under this level possibly adding additional bearish pressure to the major currency pair. 
  • Any corrective move higher will need to contend with the 1.5080 area previous support level – which could potentially see an element of resistance.

gbpusd analysis flag Sterling Lower After UK Manufacturing PMI Data   Breakout Under Recent Range Lows

gbpusd h1 Sterling Lower After UK Manufacturing PMI Data   Breakout Under Recent Range Lows

PMI, GBPUSD News, Pound/Dollar Outlook.  Nick Simpson, Forex-FX-4X.com

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