GBP/USD Price Forecast – GBP/USD Bearish Despite Hawkish Manufacturing PMI Data

The GBPUSD pair faced a steep decline as British Pound saw increased sell off influenced by sour Brexit proceedings. While macro data was positive it did little to create support as 1.32 handle proved to be truly tough resistance. Odds of a favorable agreement with EU leaders in Brussels are beginning to look slim, and Prime Minister Theresa May is increasingly caught between a rock and a hard place as EU negotiators continue to show no interest in making concessions for the UK to cherry-pick when and where it gets to remain in EU trade agreements, and hard-line Brexiteers within the UK’s parliament continue to show no interest in making concessions in their demands for a complete exit from the EU trade mechanisms.

GBPUSD Under Pressure

However the pair found support above 1.31 handle in American market hours as trade war woes re-ignited post President Trump’s comment to world trade organization on Monday that “we’ll be doing something” in retaliation to EU’s threat of actions against US sanctions .Business leaders continue to face growing fears from the lack of clarity on what the business landscape will look like post-Brexit, and PM May’s statements on Monday that she wants to see a customs union relationship maintained with the EU until 2020 did little to assuage market concerns, as the PM’s explanations continue to look thin on specific details of how she’ll make it work.

Monday’s Markit Manufacturing PMI which came at 54.4 versus the expected 54.0 had little effect on the pair’s price action. Today’s market will see US trading session close early on account of US Independence day celebrations. UK’ calendar is scheduled to see June Construction PMI at 08:30 GMT, though with markets forecasting a decline from 52.5 to 52.0, it’s looking unlikely that the GBP/USD will catch a break on the data, unless the figure prints significantly higher than the expectation. The Sterling finds itself in a bearish pattern that’s beginning to gather strength, but a holiday thinned market hours could possibly help GBP regain upper momentum if there is positive high impact news. Expected support and resistance are at 1.3050 / 1.3010 and 1.3185 / 1.3220 respectively.