- GBP/USD fell more than 0.80%, testing the 1.2750 area.
- The UK and US Manufacturing sectors showed weakness in July.
- The US JOLT figures hinted at some weakness in the labor market. With all eyes on ADP, NFPs and weekly unemployment claims.
The pound weakened against the dollar on Tuesday, while the greenback gained ground against most of its rivals. Pending the Bank of England (BoE) decision on Thursday, British weakness made the Pound lose interest, while markets await key US jobs data. Economic data reported in the session from the US was weak, but the DXY held gains above 102.00.
In Tuesday’s session, the US reported mid-level data. Although slightly below forecasts (46.4), the US July ISM PMI rose from the previous reading of 46. JOLT job openings disappointed expectations and came in at 9.58 million instead of 9.62 million. According to Fed Chairman Powell, the economy is resilient, but decisions about the future will be made based on new information, which could lead to volatility in USD price dynamics. This week, investors will be closely watching the ADP employment change, jobless claims and non-farm payrolls to start placing bets ahead of the upcoming Fed meetings.
On the other hand, the manufacturing PMI published by the Chartered Institute of Purchasing & Supply and S&P Global was in contraction territory in July, with a result of 45.3, slightly above the 45 expected. That said, the focus is on Thursday’s Bank of England (BoE) decision, where markets anticipate a 25 basis point rise. Investors will also be closely watching Andrew Bailey’s words for clues about future direction.
GBP/USD Levels to Watch
GBP/USD shows a neutral to bearish technical picture on the daily chart, suggesting that the bulls may be losing steam in the short term. The Relative Strength Index (RSI) shows a negative slope and fell below its midline, and the Moving Average Convergence Divergence (MACD) shows fading green bars. Furthermore, the pair is below the 20-day SMA but above the 100-day and 200-day SMAs, indicating that the bulls still have the upper hand.
Support levels: 1.2730, 1.2710, 1.2700.
Resistance levels: 1.2830, 1.2850,1.2900 (20-day SMA).
GBP/USD Daily Chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
