The Great Britain Pound (GBP) extended downside movement against the US Dollar (USD) on Wednesday, dragging the price of GBPUSD to less than 1.4670 as bears gain momentum. The technical bias already remains bearish because of a Lower Low and Lower High in the recent move.
Technical Analysis
As of this writing, the pair is being traded around 1.4661. A support can be noted near 1.4600, the psychological level ahead of 1.4564, the swing low of the last major downside move and then the 1.3500 support area in the long run.
On the upside, the pair is likely to face a hurdle near 1.4886, the 76.4% fib level ahead of 1.5000, the psychological number and then 1.5246, the 50% fib level as demonstrated in our daily chart. The technical bias will however remain bearish as long as the 1.5239 resistance area is intact.
UK Construction PMI
Growth in Britain’s construction industry picked up in December from a seven-month low in November, helped by a rise in commercial building on the back of the country’s economic recovery, a survey published on Tuesday showed. The Markit/CIPS UK Construction Purchasing Managers’ Index rose to 57.8 from 55.3, above the median forecast of 56.0 in a Reuters poll of economists. The survey added to some other signs that overall economic growth might gain a bit of speed in the fourth quarter after slowing in the previous three-month period.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair still appears to be a good strategy if we get a valid bullish reversal candle such as bullish pin bar, bullish engulfing or a hammer.
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