An upbeat US ISM Manufacturing PMI report has caused the GBPUSD to extend its losses on the day. The US ISM Manufacturing PMI came in at 50.9, which was better than the 48.5 reading predicted by analysts and also better than last month’s reading of 47.2.
The GBPUSD, already trading lower on the day on renewed hard Brexit fears, extended downside moves to register at 1.30205 or 163 pips lower on the day as at the time of writing this.
A deviation of 1.4 exists between the actual and consensus figure. The difference between the consensus and previous numbers is 1.3. Therefore, the GBPUSD may still touch lower levels today. Still, I expect further downside moves to be capped on the day, especially as the GBPUSD is close to the double support levels formed by the lower border of the symmetrical triangle as well as the 1.29932 support level.
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Technical Outlook for GBPUSD
The currency pair is presently approaching double support as defined above. There are two possibilities here. Price could either rebound from the support levels in fulfilment of the technical consolidation period which is formed by the boundaries of the triangle. In this instance, the price could then retest the triangle’s upper border at 1.31754 (previous highs of 9 December 2019, 6 January and 24 January 2020). A push towards 1.33193 could follow if GBPUSD breaks above the upper triangle border.
The alternative scenario sees the breakdown of the triangle to the downside, in which case the downside targets of 1.29042 (previous lows of 25 April 2019 and 23 December 2019) and 1.27851 could be the targets in the line of fire.
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