- The British Pound after trading towards 1.2920 failed against the US Dollar and moved down.
- The GBP/USD pair moved down and broke a major bullish trend line at 1.3010 on the hourly chart.
- Today in the UK, the PMI Construction for May 2017 released by the Chartered Institute of Purchasing & Supply and Markit Economics posted an increase to 56 from 53.1.
GBP/USD Technical Analysis
The British Pound recently spiked above the 1.2880 and 1.2900 resistance levels against the US Dollar, and later failed to hold gains, but failed to retain the bullish traction. Later, the GBP/USD pair started a correction, and moved below 1.2900.
During the downside, the pair broke a major bullish trend line at 1.3010 on the hourly chart, and the 23.6% Fib retracement level of the last wave from the 1.2767 low to 1.2919 high.
The recent price action suggests that the price is struggling to hold the 1.2860 support and may move down.
GBP/USD Hourly Chart
It is currently holding the 38.2% Fib retracement level of the last wave from the 1.2767 low to 1.2919 high.
A break below the 1.2860 support could ignite a downside wave in GBP/USD, taking it towards the 1.2820 level.
On the upside, the broken trend line might act as a resistance at 1.2885 if the pair moves higher. However, the most important hurdles on the upside are at 1.2900 and 1.2920.
UK’s PMI Construction
Today in the UK, the PMI Construction for May 2017 was released by the Chartered Institute of Purchasing & Supply and Markit Economics. The market was expecting a decline from the last reading of 53.1 to 52.7 in May 2017.
The actual result was a lot better than the forecast, as the PMI Construction increased to 56 from 53.1. So, it was a lot higher than the market expected, and commenting about it, the Senior Economist at IHS Markit, Tim Moore, stated:
May’s survey data reveals that the UK construction sector has started to recover strongly from its slow start to 2017.
Overall, the GBP/USD pair may rise a few pips towards 1.2880-90, but likely to face resistances on the upside.