GBPUSD gives up over 100 pips after the services PMI slump to 1996 lows, after the closure of the non-essential businesses and a massive cancellation of orders. The services PMI index came down to 34.5 in March from 53.2 in February; the market consensus was at 34.8. The services sector represents over 80% of U.K. economic output. The Employment figures fell for the first time in five months, at the fastest rate since June 2009. The Business expectations for the next 12 months dropped to the lowest since 2000. The composite Purchasing Managers’ Index covering services and manufacturing fell to 36.0, down from 53.0 in February.
Yesterday, the Retail Sales came in at -0.3% below the forecasts of 0.2% in February 2020. The yearly reading for U.K. Retail Sales came in at 0% below the estimates of 0.8%. Excluding the fuel, the Retail Sales came in at -0.5%, below the forecasts of -0.2%.
Economic data point to one of the worst recessions in modern history for Great Britain amid the coronavirus crisis, while a global recession is now inevitable, after the disastrous data from other European countries.
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GBPUSD Technical Analysis
GBPUSD is 1.05% lower at 1.2268, as the correction from two weeks that started on Monday accelerates today after the dismal services PMI data. The pair makes fresh weekly lows, and the technical outlook deteriorates. Lower levels might be on the cards after the pair failed to break above the 1.25 mark.
On the downside, support stands at 1.2261 the daily low. In case of a downside move below the 1.2261 support level, the GBPUSD price could correct lower towards the 1.2130 level in the near term, the March 27th low. If GBPUSD continues lower, the next support level would be met at 1.1775 the low from March 26th trading session.
On the flip side, the immediate obstacle for the pair stands at 1.2410 the daily top. The next resistance area would be met at 1.2472 the high from yesterday’s trading session. A successful break above 1.2472 is likely to open the way for a bigger rally to the next resistance at 1.2657 the 200-day moving average.
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