GBPUSD Movement
For the 24 hours to 23:00 GMT, the GBP declined 0.27% against the USD and closed at 1.3240, after latest data showed that UK’s construction sector suffered an unexpected contraction in September.
Data indicated that Britain’s Markit construction PMI declined to a level of 48.1 in September, dropping into the contraction territory for the first time in thirteen months, as the Brexit blight of uncertainty led to a drop in new orders. In the prior month, the construction PMI had recorded a reading of 51.10, while investors had envisaged for an unchanged reading.
Losses in the Pound were extended, amid rumbling uncertainty over Brexit negotiations, following comments from the Brexit Minister, David Davis.
The Brexit Secretary stated that Britain seeks to negotiate a Brexit agreement with the European Union (EU), but is ready to walk away without a deal.
Separately, the EU’s Chief Brexit negotiator, Michel Barnier again warned that Brexit talks are progressing too slowly and added “serious divergences” persist, including regard to the divorce bill.
Separately, according to the Bank of England’s (BoE) Financial Policy Committee (FPC) meeting minutes, policymakers warned that Brexit poses “substantial risk” to the ability of British companies to borrow from European banks and to some clearing activity which might have to relocate from London once Brexit takes place. Further, the central bank added that the committee judged the risk of disruption to wholesale UK banking services could be larger than previously estimated.
In the Asian session, at GMT0300, the pair is trading at 1.3267, with the GBP trading 0.2% higher against the USD from yesterday’s close.
The pair is expected to find support at 1.3230, and a fall through could take it to the next support level of 1.3193. The pair is expected to find its first resistance at 1.3296, and a rise through could take it to the next resistance level of 1.3325.
Moving ahead, market participants will eye the release of UK’s Markit services PMI for September, slated to release in a few hours.
The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.
