British pound shows weakness in correction
GBP / USD
According to the UK yesterday, there was an optimistic indicator for the business activity growth in the construction sector in June, as Construction PMI increased from 52.5 to 53.1. The general market mood for the temporary weakening of the dollar did not overshadow even the growth of US factory orders by 0.4% in the May estimate, with the expectation of just 0.1%.
The growth of the British pound, however, is weak. From a technical point of view, such a slow growth has time to adapt the balance sheet on the daily price chart, which does not allow us to consider growth as a medium-term movement. The signal line of the Marlin oscillator moved to the positive zone, but this output may well be false. In this case, the price rebound from the lower border of the price channel which looks quite natural. The question is, how deep this rebound will turn out to be. The current picture tells us that it will not be strong.
On the 4-hour chart, the price went over the red balance line and the blue trend, while the Marlin Indicator is also in the growth zone. The price move above the 1.3216 signal level, which will allow further growth to 1.3270, but due to the absence of American players on the market today, this is unlikely to happen. At the same time, the British PMI Services for June will come out later this day and expected to remain unchanged, showing a forecast of 54.0 in May. For the same reason, the price is unlikely to go below 1.5155 – support for the trend line. We are waiting for the resolution of the situation tomorrow, when the US PMI will leave and the minutes from the last meeting of the Fed will be published.
* The presented market analysis is informative and does not constitute a guide to the transaction.