GBP/USD Trims Monthly Gains After US Non-Manufacturing PMIs

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The GBP/USD currency pair on Thursday edged lower to trade at around 1.2535 off the current 4-week highs of about 1.2617 after the latest round of US non-Manufacturing PMIs. The currency pair continues to trade within a relatively sideways channel amid a lack of clear directional momentum.

The pair made an attempt to recover on Thursday afternoon, which pushed it off oversold levels of the 14-hour RSI in the 60-min chart. It is now pegged just above the 100-hour SMA while the 200-hour SMA is a few levels below.

GBP/USD Fundamentals Overview

From a fundamental perspective, the GBP/USD currency pair is trading ahead of a busy period in the US market. This also comes at the back of the release of the ISM non-manufacturing PMI data on Wednesday. In the latest figures, the ISM non-Manufacturing PMI for May beat the expectation of 44 with 45.4. On the other hand, the non-Manufacturing employment index missed 35.8 with 31.8. The ADP employment change for the months impressed with -2.76M versus an expectation of -9M.

The ISm non-Manufacturing Prices Paid also beat the expectation of 52.5 with 55.6 while Factory orders for April outshone -14% with -13% (MoM). On Thursday, the SU initial jobless claims for the week ending May 29 narrowly missed the expectation of 1.8M with 1.877M. Continuing claims for the week ending May 22 of 21.487M were higher than the expected claims of 20.05M. Unit Labor costs fro May were slightly better than expected while the trade balance failed to match expectations.

GBP/USD Technical Analysis (the 60-min Chart)

Technically, the GBP/USD currency pair appears to be trading in an ascending trend in the 60-min chart. This shows an attempt by the bulls to take control of a relatively sideways market. The pair has recently bounced off oversold levels of the 14-hour RSI.

The bulls will look to extend short-term gains towards 1.2650 or higher at 1.2801. On the other hand, the bears will target short-term pullback profits at around 1.2404 or lower at 1.2254.

GBP/USD Technical Analysis (the Daily Chart)

In the daily chart, the GBP/USD currency pair appears to be trading off a descending channel. The pair is on a recovery trend as it sits just above the 50% Fib level. It is also approaching overbought levels of the 14-hour RSI.

The bulls will be targeting long-term profits at around 1.2844 or higher at 76.40% Fib level at 1.3023. On the other hand, the bears will look to pounce for profits at around 38.20% Fib level at 1.2204 or lower at 1.2012.

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