Technical Analysis

Cable pares gains after PMI data, what levels to look out for today and this week?

GBP/USD eases back to around 1.3340 after slowly losing ground as buyers fail to hold a move above the 1.3400 handle

ForexLive

The PMI data isn’t giving buyers much encouragement but then again, this is pre-election data so we all know how poor economic sentiment has been over the past few months.

In any case, I reckon this could spark a bit more selling in the pound towards 1.3300 but I would still view this as an opportunity to scale in on the dip – even more so if price threatens to challenge the key hourly moving averages.

The first key line of defense will be the 1.3300 handle before we see the 100-hour MA (red line) @ 1.3257 come into play. Those will be key risk levels that buyers can lean on to try and pick at a move higher again amid some profit-taking activity.

As for today, there are also large expiries seen at 1.3300 and 1.3400 so be mindful of those when looking at pound price action later in the session.

In the big picture though:

GBP/USD W1 16-12

It is still clear that buyers have much more work to do in challenging the 61.8 retracement level @ 1.3453 and the key trendline resistance @ 1.3464.

If there looks to be a loss of momentum back under 1.3300 this week, that could spell danger for buyers and a break below the key hourly moving averages above will see sellers start to come back into the picture again.

Update: Cable now falls to a session low of 1.3323.

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