GBPUSD

GBP/USD: Looming Upward Correction?

GBP/USD has been on a downtrend for a month now as the United Kingdom struggles with the third wave of coronavirus. The country has marked a one-year anniversary of Covid-19 lockdown. Since the onset of the disease, it has recorded over 126,000 coronavirus-related deaths. This places it at the top in the European continent and fifth in the world.

However, the pound is finding support from the better-than-expected PMI figures. The manufacturing PMI reading of 57.9 is higher than the forecasted 55.0 and previous month’s 55.1.

Later on, GBP/USD will be reacting to the US PMI data. Analysts expect a US manufacturing PMI reading of 59.3 compared to February’s 58.5. If the actual figure beats the estimates, it will strengthen the greenback further; exerting additional pressure on the pound.

GBP/USD Technical Outlook

With an RSI of 29.57, GBP/USD is headed to the oversold territory. As such, it is likely to undergo an upward correction. Currently, the pair is seesawing around 1.3700. A drop beyond that level will confirm the continuation of a downtrend that may last for several sessions. If that happens, the bears will test the lower level of 1.3600, which was last hit in early February.

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Even with the upward correction, the uptrend will only be evident when the 25-day exponential moving average crosses over the 100-day EMA to the upside. In the near-term, the target will be the prior support-turn resistance level of 1.3801. If GBP/USD manages to break that resistance, the next level to watch out for is the psychological 1.3900. past this point, an uptrend will be evident.

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