GBP/USD side-lined around 1.2500 ahead of US ISM

Having bottomed out near 1.2490, the GBP/USD pair has entered a phase of consolidation around 1.25 handle, with the bulls now hoping that a weaker US ISM Manufacturing PMI report would rescue them from near the daily troughs.

Cable met fresh supply and lost almost 30-pips, after the UK manufacturing PMI report for March surprised markets to the downside, coming in at 54.2 versus 55.1 expectations and 54.6 last.

Over the last hour, latest headlines from the European Commission (EC) on draft Brexit guidelines coupled with resurgent broad USD demand, keeps any recovery-attempt in the spot short-lived.

All eyes now remain on the US manufacturing reports due to be published by both ISM and Markit; and FOMC member Dudley’s speech for next direction on GBP/USD.

GBP/USD Levels to consider            

Valeria Bednarik, Chief Analyst at FXStreet notes, “from a technical point of view, the downward potential is still limited, given that in the 4 hours chart, the pair is developing above a bullish 20 SMA, whilst technical indicators have pulled back, but are still holding above their mid-lines. The mentioned moving average is the immediate support at 1.2480, with a break below it probably resulting in a downward move towards 1.2430 a Fibonacci support. Further declines can see the pair extending towards 1.2370/90, probable bottom for today.”

“The immediate short term resistance stands at 1.2540, with an upward acceleration above it favoring an extension towards 1.2590/1.2600, “Valeria adds.