- – The British Pound declined below 1.2460 against the US Dollar, igniting more downsides.
- – The GBP/USD pair broke a major contracting triangle pattern with support at 1.2470 on the 4-hours chart.
- – In the UK today, the Construction Purchasing Managers Index (PMI) for March 2017 released by both the Chartered Institute of Purchasing & Supply and the Markit Economics posted a decline from 52.5 to 52.2.
UK Construction PMI
Today in the UK, the Construction Purchasing Managers Index (PMI) for March 2017 was released by both the Chartered Institute of Purchasing & Supply and the Markit Economics. The market was positioned for a decline from the last reading of 52.5 to 52.4.
However, the outcome below the forecast, as the UK Construction PMI posted a decline from 52.5 to 52.2. However, the business activity was positive and gained momentum in March to record its second-highest since December 2015. Commenting on the report, the Senior Economist at IHS Markit, Tim Moore, stated “UK construction firms experienced a growth slowdown in March, with the loss of momentum centred on house building. A weaker trend for residential work has been reported throughout 2017 so far, which provides an indication that the cooling UK housing market has started to act as a drag on the construction sector”.
Overall, the market might not like the result, and GBP/USD could continue to move down towards the last swing low of 1.2376.
GBP/USD Technical Analysis
The British Pound after trading as high as 1.2555 against the US Dollar started moving down. The GBP/USD weakened a lot and traded below the 1.2500 and 1.2480 support levels. The most important break was below a major contracting triangle pattern with support at 1.2470 on the 4-hours chart.
The British Pound buyers were also able to break the 50% Fib retracement level of the last wave from the 1.2376 low to 1.2555 high at 1.2465. Furthermore, the 100 simple moving average at 1.2470 was also cleared to open the doors for more declines.
Since the pair is now below many important supports, there are chances of it retesting the last swing low of 1.2376. If sellers remain in action, GBP/USD may even decline towards 1.2350.Tags: British Pound, GBP/USD Technical Analysis, UK Construction PMI, US Dollar