For GBP/USD, $1.5680-$1.5700 Holds the Key
Academy of Financial Trading | Aug 04, 2015 06:57AM ET
· British pound struggle continues to clear a monster resistance around $1.5680-$1.5700 versus the US dollar.
· UK Nationwide Housing Prices released today posted an increase of +0.4% in July 2015 just as the market expected.
· UK PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics came in at 57.1, down from the last 58.1.
UK Nationwide Housing Prices
UK Construction PMI
GBP/USD Technical Analysis
The British pound, after a failure to clear the $1.5680 resistance area against the US dollar, traded lower. There is a bullish trend line formed on the 4-hours chart of the GBP/USD, which managed to prevent further downside movement. The most important point to note is the fact that the 100 simple moving average (H4) is also positioned with the highlighted trend line. It points to the $1.5570-60 support area as a major hurdle in the short term for sellers.
However, on the upside the $1.5680-$1.5700 resistance area prevented gains on many occasions. As long as the pair is below the mentioned area, there lies a risk of a break down.
If the GBP/USD pair clears the trend line and support area, then the retracement level of the last wave from $1.5465 to $1.5687 could be tested.
h3 Fundamentals/h3Today during the London session, the UK saw some critical releases, including the Nationwide Housing Prices and Construction PMI. The most important one was the PMI Construction, which shows business conditions in the UK construction sector was released by the Chartered Institute of Purchasing & Supply and Markit Economics.
The market was not expecting an increase from the last reading of 58.1 to 58.4 in July 2015. However, the outcome was lower compared with the forecast, as the UK PMI Construction posted a decline to 57.1. The GBP/USD pair was seen under bearish pressure after the report was published.
Let us wait and see how the pair trades in the coming sessions.
/h3
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