GBP/USD keeps the red near multi-day lows, around 1.2330-25 region post-UK PMI

• GBP/USD extended the previous day’s rejection slide from the 1.2475 supply zone.
• Worsening coronavirus crisis benefitted the USD and kept exerting some pressure.
• The UK Services PMI for March was revised lower and did little to lend any support.

The GBP/USD pair edged lower through the early European session and refreshed daily lows, around the 1.2325 region post-UK macro data.

The pair extended the previous session’s rejection slide from the 1.2475 supply zone and witnessed some follow-through selling on the last trading day of the week amid the prevalent strong bullish sentiment around the US dollar.

Despite an unprecedented rise in the US initial weekly jobless claims, the greenback continued benefitting from its status as the global reserve currency amid worries over the worsening economic fallout from the coronavirus pandemic.

Apart from a broad-based USD strength, the fact that Fitch Ratings estimated that the UK’s GDP could fall by close to 4% in 2020 further took its toll on the British pound and contributed to the pair’s ongoing slide to three-day lows.

The sterling was further pressured by a downward revision of the UK Services PMI, which indicated a sharper-than-anticipated contraction in the services sector activity and came in at 34.5 in March as against the preliminary reading of 35.7.

It will now be interesting to see if the pair continues to show some resilience at lower levels or confirms a near bearish break through the recent trading range as the focus now shifts to the release of the closely watched US monthly jobs report.

Technical levels to watch