GBP/USD: Daily Technical Analysis For Jan 5, 2016

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Fundamental Analysis:

The pound fell against the United States dollar on Monday after data showing that activity in the U.K. manufacturing sector continued to slow at the end of 2015.

The Markit manufacturing purchasing managers’ index fell to a three-month low of 51.9 from 52.5 in November, compared to forecasts for an uptick to 52.7.

New export orders rose at the slowest rate in five months, the report said while factory gate prices fell for the fourth straight month.

“The UK manufacturing sector ended 2015 on a disappointing note, with its rate of growth slowing further from October’s recent high back down towards the stagnation mark,” Rob Dobson, senior economist at Markit, said.
“Although this would be an improvement on the second and third quarters, it does also suggest that manufacturing output over 2015 as a whole may be below the level achieved in 2014.”


Technical Analysis:

Intra-day bias stays on the downside with 21 and 55 EMA divergence to the south seen on the 1 hour time-frame, more sell off could be seen in the pair. Also SSRC oscillator shows more selling momentum is still in progress and am expecting further decline to 1.4662 support first. A break of 1.4662 support will bring more fall to 1.4595 weekly support 2.

Tomorrow investors would be taking a close look at the GBP Construction PMI for better clue on the currency’s outlook.


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