GBP/USD keeps the red near mid-1.2500s post-UK PMI
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GBP/USD keeps the red near mid-1.2500s post-UK PMI

  • GBP/USD extended previous day’s pullback from 200-DMA amid a modest USD uptick.
  • The risk-off mood benefitted the USD’s safe-haven status and prompted some selling.
  • Upbeat comments by the UK PM Johnson helped ease the intraday bearish pressure.
  • The final UK Manufacturing PMI was revised down, albeit did little to influence the pair.

The GBP/USD pair maintained its offered tone near the 1.2555-60 region and had a rather muted reaction to the UK macro data.

The pair extended the overnight modest pullback from the very important 200-day SMA, which coincided with April monthly swing highs, and witnessed some selling through the early European session on Friday.

The downtick lacked any obvious catalyst and could be solely attributed to deteriorating global risk sentiment, which provided a modest lift to the US dollar’s perceived safe-haven status against its British counterpart.

The sterling found some support after some optimistic comments by the UK Prime Minister Boris Johnson’s comments, saying that we have already past the peak and are on the downward slope of the virus outbreak.

Meanwhile, the pair moved little following the release of the final UK Manufacturing PMI, which was revised down to 32.6 for April from 32.8 and illustrated the severity of the economic damage caused by the pandemic.

This comes amid increasing prospects for an extended lockdown in the United Kingdom, which coupled with renewed concerns about hard-Brexit might hold investors from placing fresh bullish bets and cap the upside for the cable.

Moving ahead, market participants now look forward to the US economic docket, highlighting the release of ISM Manufacturing PMI. The data might influence the USD price dynamics and produce some short-term trading opportunities.

Technical levels to watch


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