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GBPUSD – British Pound Remains In Downtrend Vs Dollar

Key Points

  • The British Pound after struggling to clear the 1.2960-80 resistance area against the US Dollar moved down.
  • The GBPUSD pair broke a major support trend line at 1.2890 formed on the hourly chart.
  • In China today, the Caixin China Services PMI™ for April 2017 was released by Markit Economics.
  • The result was below the forecast, as the China Services PMI posted a decline from the last reading of 52.2 to 51.5 in April 2017.

GBPUSD Technical Analysis

The British Pound traded with a positive bias this past week and moved above the 1.2920 resistance area against the US Dollar. However, the pair failed to test the 1.3000 level, and traded as high as 1.2965. Later, it moved down, and broke the 23.6% Fib retracement level of the last wave from the 1.2755 low to 1.2965 high.

GBPUSD Technical Analysis

The pair also broke the 21 simple moving average and a major support trend line at 1.2890 formed on the hourly chart.

It is currently finding support around the 50% Fib retracement level of the last wave from the 1.2755 low to 1.2965 high at 1.2860. So, there can be a minor bounce towards 1.2900 before the pair resumes its downtrend.

Caixin China Services PMI

Recently in China, the Caixin China Services PMI™ for April 2017 was released by Markit Economics. The forecast was lined up for a minor increase from the last reading of 52.2 to 52.6.

The result was below the forecast, as the China Services PMI posted a decline from the last reading of 52.2 to 51.5 in April 2017. The report added that “Although business activity growth eased in April, the amount of new business placed with service providers expanded at a quicker pace in April. Some panellists mentioned that new products and improving market conditions had boosted new order intakes”.

Overall, the market sentiment is negative, calling for more declines in the GBPUSD pair towards the 1.2850.

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