GBP/USD analysis: at risk of breaking further lower

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3740

UK Markit manufacturing PMI down to its lowest in eight months.
Focus shift now to UK PM May speech on Brexit this Friday.

The GBP/USD fell at the beginning of the day to its lowest since mid-January, as adding to the latest Brexit woes, the Pound took a hit from the UK Markit manufacturing PMI, which slipped to an eight-month low of 55.2 in February according to the official release, down from previous 55.3 although above market's forecast of 55.0, which offset partially the negative headline. The pair traded as low as 1.3711 before bouncing in US trading hours but was unable to extend such recovery beyond the daily opening level at 1.3754, a sign that the Pound is still unable to attract buyers. Friday will be a key political day, as PM May is due to speak about Britain's post-Brexit relationship with the European Union, in London. Hopefully, she will present a clearer path of action this time, although early week statement from Barnier made it clear that the EU won't make it easy for her. BOE's Governor Carney is also scheduled to speak, but in a private event focused on the evolution of money and the emergence of cryptocurrencies, less relevant for Pound. The UK will also release the Construction PMI seen at 50.5 from a previous 50.2. Technically, the pair has barely corrected extreme conditions, but remains biased lower, at risk of breaking lower, as in the 4 hours chart, the 20 SMA maintains its strong bearish slope above the current level, while technical indicators remain at overbought levels, barely up from their daily lows.

Support levels: 1.3765 1.3730 1.3700

Resistance levels: 1.3915 1.3950 1.3990

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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