GBP/USD Within Striking Distance of 1.4400 Handle on Disappointing US Data
A disappointing manufacturing data from the US provided the much needed opportunity for GBP bulls to lift the GBP/USD pair back to the vicinity of 1.4400 handle.
The pair shot-up to 1.4393 after the Empire State manufacturing index fell sharply below 0.0 mark (separating improving and worsening conditions) to -9.0 in May, down from a positive reading of 9.6 in April and much lower than consensus estimates of 7.2.
Earlier during the day, the pair rebounded after dipping below 100-day SMA to a 16-day low level of 1.4332 and has now moved back to its previous support turned resistance near 1.4395-1.4400 area marking 50% Fibonacci retracement level of 1.4009-1.4770 up-swing. A follow through buying interest might assist the pair to register additional recovery in the near-term.
Valeria Bednarik, Chief Analyst FXStreet notes "according to the 1 hour chart, the downside is favored, given that in the 1 hour chart, the price is above a flat 20 SMA, whilst the technical indicators have turned flat above their mid-lines, helping, at least, to keep the downside limited. In the 4 hours chart, the price is below its 20 SMA and 200 EMA, both in the 1.4400/10 region, while the technical indicators have barely corrected oversold readings, but remain well below their mid-lines, also maintaining the upside limited."
"Support levels: 1.4320 1.4285 1.4250
Resistance levels: 1.4375 1.4410 1.4440"