GBP Exchange Rate Complex Sees Disappointing UK PMI Number
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16:40: Stock-up on sterling
Western Union put the recent moves in the UK £ into perspective:
"Following a weaker-than-expected manufacturing PMI—printing 53.3 vs. expectations of 56.7— the GBP sold off overnight relative to the USD. The long-term trend for this currency is clearly to the upside as the economic turnaround in the region is seen as clearly positive for the currency.
"With no expectations of dovish talks or rate cuts, this slight sell-off could be an opportunity to buy into the longer term uptrend of the pound.
"Look for 1.66 to act as a strong level of support for the day, with the overnight high 1.6670 coming in as resistance."
16:18: Losses should be limited
KBC Markets advise that they don't see a major decline in GBP at this stage:
"The losses of sterling against the dollar were fairly limited, but the pair drifted away from the correction to at 1.6684, reached yesterday evening. Even so, for now, there is no indication yet that the cross is preparing for a meaningful correction. The recent GBP rebound slows, but nothing more than that."
16:11: Play the edges of the range
Sean Lee at FXWW sees the Cable maintaing current ranges for a while longer:
"The fact that we are closing above previous resistance at 1.6650 is another technically bullish indicator, after the 61.8% retracement held at 1.6470. Overall the bullish bias is threatening to return but I think we may get a few more days of range trading before any big moves eventuate.
"Resistance is at another daily high near 1.6715 and I’d look for support to develop near the 55-dma at 1.6565. Play the edges of this range with a mild bullish bias."
16:02: Sterling still struggles with resistance
"GBP/USD is still struggling with the 1.6685 resistance which represents 61.8% Fib retracement of February to March selloff between 1.6823-1.6467. If we get above this level it could see the pair make a run for March 12 high at 1.6718. On the other hand, the immediate support lies at 1.6644 which marks the convergence of 200 4H-MA and Fib 50%, with a break here to open up the important support of 55 DMA at around 1.6570." - Gainsy.
12:56: Calls for caution on EUR-GBP
The euro has successfully halted a fresh bout of weakness, Luc Luyet at Swissquote Bank tells us where the key levels lie:
"EUR/GBP is trying to stabilise itself near the support at 0.8263 (see also the rising trendline). Monitor the hourly horizontal range between 0.8246 and 0.8298. Another resistance lies at 0.8322 (27/03/2014 high). Another support stands at 0.8191 (28/02/2014 low).
"In the longer term, the failure to make any follow-through after the break of the resistance at 0.8350 (06/02/2014 high) calls for caution as
prices remain below a declining 200 day moving average. A key support area stands at between 0.8168 and 0.8158."
12:47: GBP to consolidate ahead of fresh descent
RoboForex warn of a turn lower in GBP-USD:
"The pound reached new maximum and is still moving upwards. We think, today price may form consolidation channel and reversal pattern to start new descending wave with target at level of 1.6558."
11:58: GBP/USD - upcoming data
Keep an eye on the US ISM Manufacturing report with consensus estimating a rise to 54.2 from 53.2 the month prior.
"If the data matches or beats the forecast, it will likely push the USD/JPY through the 103.50 level," says Boris Schlossberg at BK Asset Management.
This could in turn pressure GBP-USD lower.
11:56: GBP gives ground back
"In UK the PMI manufacturing report missed modestly printing at 55.3 versus 56.7 eyed. This was the lowest reading in 8 months as the high value of cable and some giveback in demand weighed on the results. Cable slipped slightly in response dropping below the 1.6650 mark, but the true test of the UK economy will come Thursday when the UK PMI Services report is released. If that data point disappoints, the rebound in the pound is likely to come to an end as traders adjust their expectations of BoE tightening." - Boris Schlossberg at BK Asset Management.
09:55: EUR-GBP rebound, what are the levels?
Karen Jones at Commerzbank has an eye on the levels in EUR-GBP:
"EUR/GBP is seeing a rebound from the 61.8% retracement at .8250, this may already be over. Rallies are indicated to terminate circa .8305/15 (Elliott wave count on the 240 minute chart) for an immediate downside bias to remain.
"Current Position: Longs from .8263 partially covered .8290. Recommended trade: Exit remaining longs at market and resell. Add to shorts .8290, stops .8340."
09:35: Pound / Euro under pressure
The GBP-EUR is edging lower today thanks to a combination of better-than-expected German employment outcome and a worse-than-expected UK manufacturing PMI reading.
German Unemployment Change (Mar) read at -12K, better than the -10k expected.
Unemployment Rate s.a. (Mar) shifted down to 6.7%, had been expected to stay at 6.8%.
Eurozone Markit Manufacturing PMI (Mar) came in at an expected 53.
09:33: Manufacturing PMI disappoints
A disappointing outcome from the Manufacturing sector with Markit PMI data registering 55.3 in March (February: 56.2). Expected was 56.7.
Sterling softer, no major selling though.
08:30: GBP bulls need a strong outcome from the PMI series
According to Kathy Lien at BK Asset Management this week's PMI reports need to be very strong to sustain the rally in the currency:
"Just as the massive current account surplus is supporting the euro, last week's surprisingly large current account deficit for the U.K. should have driven sterling lower. If this week's PMI numbers surprise to the downside, traders could look back to the CA deficit as a reason to unwind their long GBP positions."
08:25: Markit Manufacturing PMI Ahead
The pound sterling exchange rate complex will show sensitivity to the release of the Markit Manufacturing PMI (March) today.
Analysts are expecting a reading of 56.7, down from 56.9.
08:15: Risks for the Euro
This morning the risks for the EUR-GBP pair will be elevated with data due out of the Eurozone; watch out for German employment numbers, Eurozone Manufacturing PMI.
At 08:55 the German Unemployment Change (Mar) figure is out. A disappointment on the -10K expected will be unhelpful. The Unemployment Rate s.a. (Mar) is expected to stay at 6.8%.
At 09:00 the Eurozone Markit Manufacturing PMI (Mar) is out, expect a reading of 53.0, anything lower will likely hurt the shared currency.
British pound holds onto gains
The British pound held onto its gains against the euro and U.S. dollar ahead of this week's PMI reports.
"The latest manufacturing activity report is scheduled for release tomorrow and while economists are looking for a slight pullback, the improvement in the Confederation of British Industry's industrial trends survey signals a potential acceleration in activity. A positive release would reinforce the notion that the Bank of England could be the next central bank to raise interest rates," says Kathy Lien at BK Asset Management.
