- Absence of fresh clues from the UK highlights the USD declines to halt the recent selling pressure.
- Sluggish data, a dovish statement from the BOE’s Carney played their role off-late.
- Services PMI, political headlines to offer fresh impulse.
Having witnessed two days of declines, mainly due to sluggish data from the UK joining dovish comments by the BOE Governor, GBP/USD seesaws near 1.2600 during Wednesday’s initial Asian session.
With the UK Construction Purchasing Managers’ Index (PMI) joining earlier Manufacturing PMI while declining to a multi-year low, bearish statements from the Bank of England (BOE) Governor Mark Carney offered additional strength to the pair sellers.
The BOE’s Carney said on Tuesday that escalation in trade tensions could take 1.0% off the UK gross domestic product (GDP). Mr. Carney also emphasized the increased chances of hard Brexit as he mentioned no automatic policy response to the break.
During early-day releases, the UK BRC Shop Price Index dropped to -0.1% from +0.8% prior in June.
Given the absence of British headlines off-late, pair buyers might have concentrated more on the US Dollar (USD) weakness emanating from the rift in the US-EU trade relations.
Investors will look forward to the key British Services PMI data for fresh impulse amid lack of political headlines.
Technical Analysis
Late-June lows around 1.2660/65 act as an immediate upside barrier towards 50-day exponential moving average (50-D EMA) level of 1.2756. Alternatively, 1.2566 and June swing low of 1.2506 gain market attention during further declines.
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