GBPUSD – British Pound To Continue Its Downtrend?

GBPUSD – British Pound To Continue Its Downtrend?

Key Highlights

  • British Pound weakened a lot vs the US Dollar recently and traded below the 1.4500 support area.
  • There was a support trend line on the hourly chart of the GBPUSD pair, which was broken during the downside move.
  • In the UK today, the PMI Construction will be released by the Chartered Institute of Purchasing & Supply and Markit Economics, which is forecasted to post a minor decrease from 52 to 51.9 in May 2016.
  • In the US, the ADP Employment Change report will be released by the Automatic Data Processing, Inc., and is forecasted to post a reading of 178K in May 2016.

GBPUSD Technical Analysis

The British Pound this week traded a few pips above the 1.4700 level vs the US Dollar, but failed to settle above it. There was a sharp downside move after the failure, and the GBPUSD pair closed below the 100 and 200 hourly simple moving average.

GBPUSD

There was also a break below a support trend line on the hourly chart of the GBPUSD pair. Overall, there was a lot of bearish pressure on the pair, which may continue in the short term.

On the upside, a recovery may face sellers near the 23.6% fib retracement level of the last drop from the 1.4728 high to 1.4385 low.

UK PMI Construction

Today in the UK, PMI Construction, which shows business conditions in the UK construction sector will be released by the Chartered Institute of Purchasing & Supply and Markit Economics. The forecast is slated for a minor decline from the last reading of 52.0 to 51.9 in May 2016.

The actual result may impact the British Pound, and if there is a decline more than the forecast, then GBP might come under a bearish pressure.

US ADP Employment Change

In the US today, the Employment Change, which is a measure of the change in the number of employed people in the US will be released by the Automatic Data Processing, Inc. The market is expecting an increase of 178K in the jobs, compared with the last reading of 156K.

There may be some action today during the NY session, as the reports in the US, and the ECB interest rate decision may create some swing moves in the short term.



Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

Aayush's latest posts