GBPUSD Gets Rejected at Falling Trendline, Hangs on to 100 SMA Ahead of UK PMI Reports

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Written By: Angeline Feliciano

May 21, 2020, 06:34 BST 06:34

GBPUSD

Summary:

GBPUSD is one of the biggest losers in today's Asian session. As the currency pair clings to the 100 SMA, can it hold on with the UK PMI reports on tap?

GBPUSD is among the biggest losers in today’s Asian session, lagging only behind AUDUSD and NZDUSD. Risk aversion seems to be dictating market sentiment this morning with the yen, dollar, and Swiss franc performing better than their non-safe haven counterparts. As of this writing, the currency pair is down by 0.34% at 1.2197. Can the UK PMI reports help provide GBPUSD with support?

Due at 9:30 am GMT, the UK manufacturing PMI is expected to print at 35.1. Meanwhile, the services PMI is eyed at 24.1. Better-than-expected figures could help GBPUSD hold its ground. Alternatively, disappointing figures could push GBPUSD even lower.

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GBPUSD Outlook

On the 4-hour time frame, it can be seen that GBPUSD bounced off resistance at the falling trendline (from connecting the highs of April 30, May 8, and May 19). Resistance in the area around 1.2270 held and the recent downtick in GBPUSD could suggest that the currency pair may soon be headed to 1.2075 where it bottomed on May 18.

However, it’s worth noting that the currency pair is currently testing support at the 100 SMA on the 1-hour chart. A strong bullish candle closing around 1.2210 could mean that there are still enough buyers left for GBPUSD. Should this happen, we could see the currency pair soon retest its May 19 highs around 1.2290.

Written By: Angeline Feliciano

Angeline Feliciano has been trading Forex for over ten years. She has invaluable experience working in FX education companies like BabyPips.com and Learn to Trade as a trader, currency analyst, trading coach, and presenter. Aside from these roles, she has also created intensive educational content on fundamental analysis which is heavily sought after by retail traders. She has taught hundreds of people how to trade the FX market in the Philippines and in Australia. When she is not trading, you can find her in the gym lifting weights.