GBP/USD losing height, nears key Fibo level

Having breached stiff resistance at 1.3315 (23.6% of 1.5019-1.2789) yesterday, the GBP/USD pair failed to extend gains in Asia and is now sitting just above 1.3315 (now a support).

Eyes UK services PMI

Sterling traders await the release of final UK July services PMI release, which is likely to confirm the sharp post Brexit slowdown highlighted by the preliminary release last month.  Traders are bracing up for a much weaker print as manufacturing PMI was revised lower on Monday.

The data comes a day before BOE rate decision and QIR inflation report release. The bank is widely seen cutting rates tomorrow. Hence, Tuesday’s gains in GBP/USD look contradictory at first, but are the result of a broad based USD sell-off.

GBP/USD Technical Levels

The spot was last seen trading around 1.3320. A breakdown of support at 1.3315 (23.6% of 1.5019-1.2789) would expose 1.3247 (5-DMA), under which the spot could target 1.32 (zero figure). On the other hand, breach of resistance at 1.3365 (previous day’s high) could yield move higher to 1.34, although a major resistance is seen directly at 1.3480 (July 15 high).