The pound fell further on Monday, hitting session low at 1.2863, after UK manufacturing PMI disappointed in August (52.8 vs 53.9 f/c) falling to the lowest levels in two years. Downbeat data add to negative near-term outlook, as the pair extends pullback of past two days, with Monday’s action opening with gap-lower. Sterling came under pressure on comments from EU top Brexit negotiator who strongly opposed proposals of Britain’s PM Theresa May on post-Brexit trade, with weak figures adding to negative near-term outlook. Fresh weakness pressures next pivotal support at 1.2850 (20SMA), close below which would generate bearish signal for further easing. Momentum studies continue to weaken and support scenario. With thin markets expected during the US session due to Labor day holiday, focus turns towards tomorrow’s release of Construction PMI and Inflation report, as well as UK Services PMI on Wednesday.
Res: 1.2910; 1.2933; 1.2950; 1.3000
Sup: 1.2863; 1.2850; 1.2807; 1.2751
