GBPUSD Drops on Poor Construction PMI Reading & PM Johnson Speech

GBPUSD is down 0.29% on the day, and currently trading at 1.2265 after the United Kingdom Markit Construction PMI came in at 43.3, and below forecasts of 45 in September. The Construction PMI shows that construction activity continues to deteriorate amid Brexit uncertainty. Investors await the speech by PM Boris Johnson at 11:00GMT as he will announce the final Brexit offer to the EU.  I expect high volatility for the GBPUSD pair during his speech, and I think traders will be wary with aggressive positions.

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Earlier today, around 7 am London time, GBPUSD tested the 50-day moving average 1.2255 and managed to bounce. However, the price is now back below the 50-day MA, as the Construction PMI figures disappointed investors.

Currently, immediate resistance can be found at the daily high of 1.2306, with more offers probably emerging at the 1.2435, the 100-day moving average.

On the downside, the first support level for GBPUSD stands at yesterday’s low of 1.2204. A convincing break below the 1.2204 level will open the way for a decline down to 1.2078, the low from September 4th.

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