Fresh sellers came-in as US ISM non-manufacturing came-in at 4-month high and also carried a sharp rise in employment figures. Consequently, weak ADP became a distant memory as ISM non-manufacturing employment index is the strongest leading indicator of monthly non-farm payrolls figure.
Eyes UK services PMI
The main event today is the UK services PMI release (expected 53.5, previous 53.7). A weaker-than-expected print would be a sort of attestation by the highest authority to the fact that UK economy is witnessing a marked slowdown…heading into Brexit referendum. Manufacturing sector has already suffered job losses in April and if services PMI reports job losses too then that would be adding salt to the injury. Hence, GBP/USD could drift lower towards 100-DMA at 1.4382 levels.
On the other hand, better-than-expected services PMI could help Sterling chew through offers around 1.4549 (23.6% of 1.3835-1.4770).
Support – 1.4461, 1.4413, 1.4382
Resistance – 1.4549, 1.4635, 1.4669
- Pair trades on a positive note around 1.4521 and looking to test supply at 1.4549 (23.6% of 1.3835-1.4770).
- Traders should watch out for possible rejection at 1.4549 as that is likely to be followed by a break below daily low of 1.4492 and drift lower to 1.4461 (previous day’s low).
- Hourly chart also shows crossover between 50-MA and 200-MA and that could further add to pressure around Cable.
- With weaker-than-expected services PMI, the selling could gather pace below 1.4461, thereby exposing major support at 1.4382 (100-DMA).