The forex week began with a big move by the British pound. It fell below the below the 1.40 mark. This happened after bad manufacturing PMI was released in Britain, and after the good ISM Manufacturing PMI in the US.
GBP/USD is now trading at 1.3977, after breaking support lines, and breaking the 1.40 psychological line. It last visited this vicinity on January 27th. During January, cable went as low as
Also against the Euro, the pound finally broke out of range trading. EUR/GBP broke resistance at 0.8980 and climbed aboved the round 90 mark.
British Manufacturing PMI was weak, slighly worse than the low expectations. The figure was 34.7, less than 34.9 that was predicted. The pound made a first attempt to fall under 1.40, but stopped.
And then, after the American ISM Manufacturing PMI was surprisingly better, at 35.8, the move began. Early expectations were for a value of 34.
Yesterday I wrote that breakouts are expected in EUR/USD and USD/JPY, especially towards the end of the week, when a decision rate in Europe is expected, and of course the Non Farm Payrolls.
In the meantime, the pound broke out. Also note the Canadian dollar. In Canada, GDP was worse than expected, falling by 1%. USD/CAD went up, and now trades at 1.2891. Kathy Lien suggests that the loonie could head for 1.30.
So, we already have a strong start for the week. Tomorrow can be called “Super Tuesday”. I’ll publish an outlook for tomorrow later on.
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