1 May 2015
GBP/USD more vulnerable to weak UK data - FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, maintains the view that a weak UK manufacturing PMI today along with the election uncertainty might have an amplified bearish effect on the GBP/USD.
Key Quotes
“The GBP/USD pair fell to an intraday low of 1.5302 after the data in the US showed the weekly initial jobless claims fell to a 15-year low. A minor technical correction, then followed to ensure the pair ended at 1.5352.”
“The GBP appears more vulnerable than ever to a weaker UK economic data, given the presence of the election uncertainty. Moreover, the markets are now likely to focus on the threat of a hung parliament following the May. 7 elections in the UK. The slowdown in the US in the first quarter has been priced-in by the markets. Plus, the Fed has maintained its optimistic stance regarding the future economic growth. So the focus is likely to be on the UK story now.”
“The UK manufacturing PMI due today could provide some support to the GBP if it is encouraging. However, if the data highlight a slowdown in the activity, the bearish effect on the GBP could be amplified due to presence of election uncertainty.”
“The pair currently trades at 1.5342, which is the 100% fib expansion level of the move from 1.4564-1.5051-1.4854. The pair managed to sustain above the same on closing basis in the previous session. Thus, fresh bids could be seen in case the pair sustains above 1.5342 in the early European session, opening doors for a re-test of 1.54.”
“In case, it breaks below 1.5342, the 1.53 level is likely to act as strong support. A daily close below 1.53 could shift risk in favor of a further downside to 1.5227-1.5155.”
Key Quotes
“The GBP/USD pair fell to an intraday low of 1.5302 after the data in the US showed the weekly initial jobless claims fell to a 15-year low. A minor technical correction, then followed to ensure the pair ended at 1.5352.”
“The GBP appears more vulnerable than ever to a weaker UK economic data, given the presence of the election uncertainty. Moreover, the markets are now likely to focus on the threat of a hung parliament following the May. 7 elections in the UK. The slowdown in the US in the first quarter has been priced-in by the markets. Plus, the Fed has maintained its optimistic stance regarding the future economic growth. So the focus is likely to be on the UK story now.”
“The UK manufacturing PMI due today could provide some support to the GBP if it is encouraging. However, if the data highlight a slowdown in the activity, the bearish effect on the GBP could be amplified due to presence of election uncertainty.”
“The pair currently trades at 1.5342, which is the 100% fib expansion level of the move from 1.4564-1.5051-1.4854. The pair managed to sustain above the same on closing basis in the previous session. Thus, fresh bids could be seen in case the pair sustains above 1.5342 in the early European session, opening doors for a re-test of 1.54.”
“In case, it breaks below 1.5342, the 1.53 level is likely to act as strong support. A daily close below 1.53 could shift risk in favor of a further downside to 1.5227-1.5155.”