GBP/USD Rose As Weak PMI Data Weigh On Dollar

Fundamental Analysis

* Greenback Gloom: The Pound Sterling strengthened against the US Dollar after the recent release of unexpectedly weak U.S. Manufacturing PMI data, which negatively impacted the dollar. The Institute for Supply Management (ISM) reported on Monday that the U.S. manufacturing sector contracted at a faster rate in May. The ISM Manufacturing PMI fell to 48.7 in May from 49.2 in April, missing the market expectation of 49.6. This disappointing data led to renewed selling pressure on the Greenback, increasing demand for other currencies.

Technical Analysis

* Technical Breakout: GPUSD was traded higher following prior breakout above the previous resistance level 1.28000. MACD which illustrate bullish momentum signal with the recent bullish structure breakout suggest the pair to further extend its gains.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 1.28950. Conversely, a potential retracement is also to be expected and the price could head back towards 1.26850 should the price breach back above the 1.28000 level.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving forward, investors will closely monitor upcoming data such as US ISM Services PMI and the official employment data, set to be released on Wednesday and Friday, respectively. In contrast, the United Kingdom’s economic calendar does not feature any major events in the coming days.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and UK data, central bank updates and any shifts in the US Dollar’s strength. by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.