GBP/USD rebounds strongly and breaks above 1.1860 after mixed US and UK PMIs

  • GBP/USD jumps from record lows after US economic data reignites recession fears.
  • US S&P Global PMI data was mixed, although it reignited recession fears.
  • The UK S&P Global Manufacturing PMI slipped into contraction territory.
  • GBP/USD Price Analysis: If it breaks above the 1.1900 level, the 1.1936 level can be tested.

The GBP/USD recovered some ground rebounding from weekly lows below 1.1800 on gloomy US economic data, which raised fears of a US recession. As a result, the USD fell, along with US Treasury yields, while most G8 currencies advanced. GBP/USD is trading at 1.1860, having hit a yearly low at 1.1716, with the major currency trading over 100 pips in reaction to the aforementioned data, while sentiment shifted positively, with US equities winning.

US and UK global PMIs were mixed; consequently, the dollar weakened

The S&P Global PMI Composite for August showed that US business activity contracted for the second month in a row. In contrast, the manufacturing PMI, although slowing down, remained in expansion territory at 51.3, lower than expected. The figures put the composite index at 45, below estimates of 47, while the services PMI slumped to 44.1, below forecasts.

Meanwhile, during the European session, S&P Global revealed that the UK Manufacturing PMI for August slumped into contraction territory, falling to 46.0, below estimates of 51.1, fueled by high energy prices across Europe. , supply chain disruptions and higher interest rates. Contrary to the US, the UK Services PMI was unchanged at 52.5, while the Composite PMI fell to 50.9.

What to watch out for

Durable Goods Orders for July will be released on the US economic docket, along with housing data, illustrating the slowdown in the US economy on Wednesday. In the UK, the CBI Distributive Trades will be released on Thursday.

GBP/USD Price Analysis: Technical Outlook

GBP/USD is rising as buyers look to test the 19th Aug daily high at 1.1935. Once GBP/USD broke above the 1.1800 figure, it was followed by the daily high of August 22nd at 1.1836. The next resistance will be the 1.1900 figure on its way to the daily high on the 19th of August. Although the pound is recovering, the Relative Strength Index (RSI) remains in negative territory, so caution is advised.

Technical levels

GBP/USD

Panorama
Last Price Today 1.1846
Today’s Daily Change 0.0080
Today’s Daily Change % 0.68
Today’s Daily Opening 1.1766
Trends
20 Daily SMA 1.2088
50 Daily SMA 1.2081
100 Daily SMA 1.2355
200 Daily SMA 1.2868
levels
Previous Daily High 1.1838
Previous Daily Minimum 1.1742
Previous Maximum Weekly 1.2148
Previous Weekly Minimum 1.1792
Monthly Prior Maximum 1.2246
Previous Monthly Minimum 1,176
Daily Fibonacci 38.2% 1.1779
Daily Fibonacci 61.8% 1.1802
Daily Pivot Point S1 1.1726
Daily Pivot Point S2 1.1686
Daily Pivot Point S3 1.1629
Daily Pivot Point R1 1.1822
Daily Pivot Point R2 1.1878
Daily Pivot Point R3 1.1918

Source: Fx Street

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