GBP/USD’s Bullish Channel Breakout – Manufacturing PMI Disappoints
Arslan Butt • 1 min read
What’s up, fellas.
Although the economic calendar is lacking top-tier fundamentals, the manufacturing PMI data for the United Kingdom shook the market. The GBP/USD pair slipped over 75 pips on the news release, helping us secure quick 30 pips, our share in the price action.
Good thing is, we captured 3 winning signals in a row, despite the Labor Day holiday. Two trades came from Gold and one from GBP/USD.
Manufacturing PMI – According to the Markit report, the high levels of economic and political risk pervasive across domestic and global markets extended to count heavily on the performance of UK manufacturing during August. Manufacturing volumes declined as inputs of new work shrank at the fastest pace in over seven years, while business confidence sank to a record low. The PMI figure plunged to 47.4 in August, down from 48.0 in July, placing heavy pressure on GBP/USD.
Technically, the GBP/USD pair has crossed below 1.2150, violating the bullish channel and EMA support levels. The Cable has closed 4 hours candle below 1.2115 level and guesses what it’s a bearish engulfing candle. Patterns like this typically drive bearish trends in the market.
Thus, the continuation of a bearish trend in GBP/USD may extend sell-off until 1.2050.
GBP/USD – Technical Levels
Key Trading Level: 1.2177
GBP/USD – Trading Signal
We have already closed selling trade and now I’m looking for anther one to stay bearish below 1.2100 to target 1.2050 and 1.2018.