- GBP/USD hit its daily low following the release of the US S&P Global PMIs.
- Business activity in the UK reignited recession fears and weakened the GBP.
- Market expects Bank of England to hike rates 50 basis points on February 2 – RTRS Survey.
The pair GBP/USD falls from 1.2400 and falls towards the 1.2310 zone in the middle of a session of mixed mood, as US stocks fluctuate between bullish and bearish. However, the US dollar (USD) is losing traction and giving ground, limiting the fall of GBP/USD. At time of writing, GBP/USD is trading at 1.2320 after hitting a high of 1.2413.
GBP/USD fell to 1.2260 after better-than-expected US PMIs and weak UK data
Wall Street presents a mixed picture, but it is a matter of time before it turns positive. S&P Global reported that December United States (US) PMIs improved, with Services PMI coming in at 46.6 vs. 44.7 expected, while Manufacturing rose to 46.8 vs. 46.2 estimated. The S&P Global Composite, which measures both indices, rose by 46.6, above the 45 forecast. Although business activity continues to show deterioration in the US economy, the downward trend has moderated somewhat.
On the other hand, UK business activity disappointed investors, with business activity falling at its fastest rate in two years, according to an S&P Global/CIPS survey. “Weaker-than-expected PMI numbers for January underscore the risk of the UK entering recession,” said Chris Williamson, chief economist at S&P Global.
Meanwhile, a Reuters poll showed that 29 of 42 economists estimate the Bank of England will raise interest rates by 50 basis points to 4% on February 2, while 13 estimate a 25 basis point hike. Also, economists expect a top rate of 4.25%.
GBP/USD Technical Analysis
Technically, the GBP/USD daily chart suggests that the pair is consolidating around 1.2400, unable to go higher and test the 1.2500 signal. Also, in the last two days, successive lower lows have opened the door for further losses. It should be noted that the GBP/USD pair seems to be forming a double top. However, GBP/USD would need to fall below the January 6 daily low at 1.1841 to confirm its validity.
Key support levels are 1.2300, the 20-day EMA at 1.2222 and 1.2100. On the other hand, GBP/USD key resistance levels are 1.2400, followed by the high of 1.2454 and 1.2500.
GBP/USD
Overview | |
---|---|
Last price today | 1.2322 |
today’s daily change | -0.0051 |
today’s daily variation | -0.41 |
today’s daily opening | 1.2373 |
Trends | |
---|---|
daily SMA20 | 1.2159 |
daily SMA50 | 1.2123 |
daily SMA100 | 1.1732 |
daily SMA200 | 1.1975 |
levels | |
---|---|
previous daily high | 1.2448 |
previous daily low | 1.2324 |
Previous Weekly High | 1.2436 |
previous weekly low | 1.2169 |
Previous Monthly High | 1.2447 |
Previous monthly minimum | 1.1992 |
Fibonacci daily 38.2 | 1.2371 |
Fibonacci 61.8% daily | 1.2401 |
Daily Pivot Point S1 | 1.2315 |
Daily Pivot Point S2 | 1.2257 |
Daily Pivot Point S3 | 1.2191 |
Daily Pivot Point R1 | 1,244 |
Daily Pivot Point R2 | 1.2506 |
Daily Pivot Point R3 | 1.2564 |
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.