GBPUSD Eyeing Services PMI For Gains

Key Highlights

  • In the last 24 hours the British Pound has surged higher, however it has run into resistance right around the 200 hourly MA, and eased slightly lower in recent hours.
  • UK Services Purchasing Managers Index (PMI) will be released by both the Chartered Institute of Purchasing & Supply and the Markit Economics, and expected to decline from 58.9 to 58.5.
  • GBPUSD has a major resistance formed around 1.5220-30 where sellers are likely to appear.

GBPUSD – Technical Analysis

After a solid start this week, the British Pound struggled to break an important confluence area of the 100 and 200 hourly moving averages. It eased back towards the 38.2% fib retracement level of the last wave from the 1.5087 low to 1.5217 high where it received some support.

There is a bearish trend line formed as well on the hourly chart, which is aligned perfectly with the confluence of 200 and 100 MAs. The technical picture shows there is a limited possibility of a break higher, and an upward potential is very low as the 1 hour chart shows the technical indicators aim lower. As long as the GBPUSD pair is below the 1.5220-30 resistance area, it might continue to head lower.

GBPUSD 05.06.2015

The pair may retreat down to the 50% fib retracement level at 1.5152 if buyers keep fading. However, the downward risk will remain limited as there is a major risk event lined up in the UK today during the London session.

UK Services PMI

Today, the UK Services Purchasing Managers Index (PMI) will be published by both the Chartered Institute of Purchasing & Supply and the Markit Economics. The forecast is lined up for a minor decline from the last reading of 58.9 to 58.5. A softer-than-expected PMI might weigh on the British Pound in the short term.

New Zealand Employment Report

Earlier during the Asian session, New Zealand saw a major release. The Employment Change figure pointing the change in the number of employed people in New Zealand was published by the Statistics New Zealand.

The forecast was of a 0.8% change in employment in the first quarter of 2015, but the outcome was a bit lower with an increase of 0.7%. Also, the market was expecting the New Zealand Unemployment Rate to decrease from 5.7% to 5.5%, but it rose to 5.8%. In the report, the labor market and households statistics manager, Diane Ramsay, stated that “This is the greatest share of New Zealanders we have ever seen in the labour force. The largest increase came from 20 to 34-year-olds, who accounted for nearly half this year’s increase”.

Overall, the data weighed on NZDUSD, as the pair fell to trade near 0.7450.

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.

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