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The Great Britain Pound (GBP) extended downside movement against the US Dollar (USD) on Friday, dragging the price of GBPUSD to less than even 1.5515 ahead of some key economic events. The technical bias however remains bullish in the long run due to a Higher High and Higher Low in the recent wave on daily chart.
Technical Analysis
As of this writing, the pair is being traded around 1.5512. A support may be seen around 1.5459, the 61.8% fib level ahead of 1.5349, the 76.4% fib level and then 1.5170, the swing low of the last major dip as demonstrated in the following daily chart.
On the upside, the pair is expected to face a hurdle near 1.5550, the confluence of 50% fib level as well as psychological number ahead of 1.5750, again the confluence of 23.6% fib level and psychological number and then 1.5928, the swing high of the last major rally. The technical bias will however remain bullish as long as the 1.5170 support area is intact.
US Manufacturing PMI
Markit Economics is due to release the Manufacturing Purchasing Managers Index (PMI) figure of the world’s largest economy today during the early New York Session. According to the average forecast of different economists, the manufacturing PMI registered 53.6 points reading in July as compared to the same reading in the month before. Generally speaking, a PMI reading above 50 shows expansion in the manufacturing activity and vice versa. Thus a better than expected actual outcome might incite renewed selling pressure in the price of cable.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy if we get another bearish confirmation in the form of a bearish pin bar or bearish engulfing candle.
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