Monday’s worst performing currency was the British pound which fell towards 1.3250 after weak U.K. manufacturing figures prompted concerns over the country’s health. The GBP/USD extended its slide this morning and tagged a low at 1.3229. On the other side, a stronger U.S. dollar contributed to the cable’s decline. After testing the crucial support area around 1.3230/1.32, we will shift our focus now to a significant break of that support-zone which could lead to further losses towards 1.3150 and 1.3050. With GBP/USD remaining below 1.34 we generally favor the bearish bias in short-term time frames.
The U.K. Construction PMI report is scheduled for release at 8:30 UTC, but this report is not expected to have a major impact on the pound.
The euro extended its slide against the greenback and fell towards 1.17. The U.S. dollar’s recovery was bolstered by a stronger ISM manufacturing sector activity index, which hit a 13-year high. As mentioned in our yesterday’s analysis we still wait for a significant break below 1.1680 in order to anticipate further losses in the EUR/USD.
There are no major economic reports scheduled for release today, so the price action could hinge on the appetite for dollars.
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