Tuesday, July 2, 2019

GBP/USD - 02 July 2019

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Fundamental Highlights

The Pound fell and broke out from the consolidation as traders were drawn to the greenback after recent positive signs from the US-China trade truce. Moreover, the British Manufacturing PMI unexpectedly dropped below the forecast by remaining in contraction territory, mainly caused by Brexit uncertainty. However, the US ISM Manufacturing PMI beat expectations, boosting the Dollar even higher across the board. On the other hand, the front-runner for the UK PM’s post, Boris Johnson, is considering a proposal to cut short the British Cabinet by merging/removing few departments off the government if he becomes the PM. Brexit uncertainty combined with a stronger US Dollar will keep the pressure on the Sterling bulls and the market sentiment on the bearish side. Today’s key events to watch will be the Monthly Construction PMI data and the speech from the Bank of England Governor Mark Carney.

Technical Analysis

The Sterling broke below the 50/200-day moving averages and the 1.2660 support, as the bears found momentum once again. The sellers will try to retest 1.26 support in today’s session as the bears will attempt to pause the bearish momentum by breaking above 1.2660. A break below 1.26 will open doors for further weakness towards 1.2560.

Support: 1.26 / 1.2560
Resistance: 1.2660 / 1.2715

Chart (H4)
GBPUSD