GBP/USD printed fresh lows after US data but remains above 1.2800
- GPB/USD bottomed after US ISM but held above the 1.2800 handle.
- US dollar is the top performer supported by US data, yields and risk aversion from EM.
The GBP/USD pair dropped further following the release of US data at 1.2809, hitting a fresh weekly low and then bounced quickly back to the previous range. Since the European session, cable is moving in a range with support above 1.2800 and resistance under 1.2850.
It remained within the range during BoE Inflation Hearings and also after US data. Carney’s words did not affect market expectations and offered no surprises. Regarding the US, the ISM manufacturing index rose surprisingly to 61.3 up from the July reading of 58.1. “The ISM is at levels historically consistent with GDP growth of around 8%”, said James Knightley, Senior Economist at ING.
Earlier today, the UK Construction PMI showed a decline from 55.8 to 52.9. On Wednesday the UK Service PMI is due. “The big picture for the UK economy is still framed by the Brexit related uncertainty, that has actually overshadowed the Bank of England officials parliamentary testimony on Tuesday”, said Mario Blascak, from FXStreet.
As of writing, GBP/USD stands at 1.2830/40, consolidating daily losses, on the back of a stronger US dollar across the board on Tuesday. The greenback remains strong supported by better-than-expected data, higher US yields and risk aversion.
GBP/USD Levels to watch
To the upside, immediate resistance is seen at 1.2850 (US session high) followed by 1.2875 and 1.2900. On the flip side, support could be located at 1.2810 (daily low), 1.2790 and 1.2750.