For the 24 hours to 23:00 GMT, the GBP declined 6.18% against the USD and closed at 1.2223, amid speculation that the Bank of England (BoE) might cut interest rates below zero to support the economy.
On the data front, UK’s Markit manufacturing PMI climbed to 40.6 in May, more than market expectations for a rise to a level of 36.0 and compared to a level of 32.6 in the previous year. Additionally, the Markit services PMI surged to 27.8 in May, more than market forecast for a rise to a level of 25.0 and compared to a reading of 13.4 in the prior month. Meanwhile, the GfK consumer confidence dropped to -34.0 in May, reaching to its lowest level since 2009 and compared to a reading of -33.0 in the prior month. Additionally, the CBI balance of firms reporting total order book above normal declined to -62.0 in May, hitting its weakest level since October 1981 and compared to a level of -56.0 in the prior month.
In the Asian session, at GMT0300, the pair is trading at 1.2216, with the GBP trading 0.06% lower against the USD from yesterday’s close.
The pair is expected to find support at 1.2185, and a fall through could take it to the next support level of 1.2153. The pair is expected to find its first resistance at 1.2249, and a rise through could take it to the next resistance level of 1.2281.
Looking forward, traders would keep an eye on UK’s public sector net borrowing and retail sales, both for April, slated to release in a few hours.
The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.