GBPUSD Turns Range Bound Post Disappointing Manufacturing Data

GBPUSD on Tuesday hit 3 months low post a disappointing economic reading update. Mortgage approvals, consumer credit, manufacturing PMI were all dovish with Manufacturing PMI reading hitting lowest in 17 months. This marks the weakest reading since November 2016. The unexpectedly strong slowdown in the UK manufacturing activity in April adds to the series of the negative UK-related macro news of last week’s that dim the rate hiking chances for the Bank of England to go ahead with 25 basis points rate hike on May 10, when the Bank releases the quarterly Inflation Report.

GBPUSD Continues to Suffer

The pair remains extremely soft trading now below the 1.3700 handle in a price range of 1.360 to 1.362. The only silver lining in current session being dovish reading in US manufacturing PMI & Employment which helped control US dollar’s momentum. Post the steep price decline during last trading session, the price has taken to range bound movement during early hours of today’s trading session. Factors that are prime focus for traders during today’s trading session when GBPUSD is considered are UK’s Construction PMI and US ADP Non Farm employment data / FOMC statement.

A positive reading in Construction PMI could help GBP gain support around 1.356 while a dovish statement from Fed could help GBP breach immediate resistance at 1.3645. Any signs of June rate hike by the fed during today’s trading session will help USD to gain further momentum breaking today’s range bound performance and the pair could see price go as low as 1.3521 within today’s trading session. While manufacturing PMI has caused GBP to go on bearish slump Investors are also on lookout for Service PMI to be released tomorrow as it is expected to have a greater impact on market and currency alike.

A positive reading in Construction and Service PMI could possible lead to GBPUSD making a bullish breakout while a negative reading for either of these PMI could increase the negative sentiment currently influencing the sterling as dovish outcome for either of these PMI will greatly affect Bank of England’s future policies and interest rate decisions. Support and resistance for the pair during today’s trading session are at 1.35210 and 1.36460 respectively.