Pound Sterling falling after distressful UK service PMI data.
- Sad UK service PMI report highlights new-business at a 2 yearly low
- GBP supports hanging around a positive Brexit headline
- New discussion emerging in EU regarding UK-Irish border solution
The recent look towards UK economy is showing that concerns over Brexit issues are starting to bite harder, as UK is experiencing the slowest rate of business expansion since March, 2018 and the second lowest reading was in July 2016.
This disappointing data is an evidence of paramount significance that the Brexit worries are taking an intense toll of UK economy, as new business and business expansions are at fresh 2-yearly low.
GBP/USD daily chart
This “weaker than expected” report has been followed by a Euro-zone Sentix Investor Confidence release and the confidence was slipped to 8.8, when the expectation was at 9.8. However, the prior release data was at 11.4.
On the other end of the horizon, positive Brexit headlines still are acting as key supports GBP, as the GBP downward momentum is “slower than anticipated”, after this massive fallout in UK PMI report. A new discussion is emerging regarding the Irish border proposal in EU and Times magazine recently printed a positive Brexit report.
At this moment, GBP/USD is being traded at 1.2985 (05.11.2018, GMT. 13.00) and GBP market trends are getting extremely nervous. For now, the GBP decline is slower and positive Brexit headlines are playing a key role.
GBP key support still resides at 1.2850 and its key resistance is residing at 1.3050 region. A fall below 1.2900 region would enhance the risk of losing previous week’s gain.
However, traders should anticipate a GBP downward momentum and caution should be applied for a buying position, as market-sentiments are getting neutral ahead of US mid-term election.
Read more on British Pound trends here
[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]