GBP/USD Forecast: Close to Its Weekly Low
The GBP/USD pair retreats from a high set at 1.4447 achieved after the release of the latest Markit Services PMI for May, up to 53.5 from a previous 52.3, as despite beating also expectations of 52.5, the reading is close to multi-year lows. Furthermore, and despite majors are trading within tight ranges, the dollar is broadly stronger ahead of the release of the US May Nonfarm Payroll report.
Investors are hoping that the May employment figures are strong
enough to confirm a soon-to-come rate hike in the US, although keep in
mind that some strong growth in wages is required to confirm so. In the
meantime, the Pound is among the weakest currencies of the board, as
fears over a Brexit prompted a sell-off of the UK currency earlier this
The GBP/USD pair stands not far from the weekly low set at 1.4385, the level to break to confirm additional declines, with the next bearish target at 1.4330, May 16th low. Below this last, the doors are open for a downward extension towards the 1.4250 region.
Advances will likely be seen as selling opportunities, up to 1.4460,
the immediate resistance, with only a recovery beyond 1.4520 signaling a
possible recovery for the upcoming week.