GBPUSD Fails to Breach 1.34 despite Upbeat Macro Data

The Pound managed to stabilize and got off the lows. But the GBPUSD pair faces tough hurdles as services sector data are to be published today. There was a break above a key bearish trend line with resistance at 1.3310 on the 4-hours chart of GBP/USD as the pair broke past 1.335 price handle on upbeat macro data yesterday. But the momentum lacked strength as the pair began falling down shortly after breaching 1.338 price handle. This slow down in momentum during yesterday’s session was triggered post renewed brexit fears yesterday as many news sites and media began speaking of Armageddon scenario with an article from Independent.co.uk mentioning possible scenario were there is shortages of medicines, food and fuel –within two weeks of leaving the EU.

GBPUSD Buoyant

However the pair has managed to hold out above the 1.33 handle during most of Asian market hours and as of writing this article the pair is moving around 1.3320. The Sterling knocked lower on Monday after the UK Construction PMI for May came in unchanged, piling on in a week that has already seen Brexit concerns swing back to the forefront, with little resolution seen on the current Ireland border issues, post-Brexit trade conditions, and a Brexit withdrawal bill due in the House of Commons on June 12th. The GBP has managed to hit the brakes on the decline, and has steadied out near the 1.3300 major level after clocking in a daily high just beneath 1.3400 in Monday’s trading.

Today’s macro data in UK market sees the UK’s Markit Services PMI for May, expected at 53.0 compared to the previous reading of 52.8. The BRC Retails Sales indicator dropped some positive figures in the late Monday session, printing at 2.8% compared to the expected 0.8% drawdown and the previous contraction of -4.2%. On the US markets investors await market composite and service PMI data and JOLTS Job opening and ISM Non-Manufacturing PMU results. From technical standpoint the pair is near cross roads, a better macro data in US could drag the pair down below 1.325 handle while a scenario that favor’s pound could help the pair move up and consolidate above 1.335 price range. Expected support and resistance for the pair are at 1.3290 / 1.3245 / 1.3200 and 1.3375 / 1.3420 / 1.3460 respectively.