GBP/USD testing lows on PMI, breaches 1.2500

The Sterling is losing the grip at the end of the week, dragging GBP/USD to the area of daily lows in sub-1.2500 levels.

GBP/USD offered post-PMI

Spot met extra downside pressure after Markit’s Services PMI missed expectations in January, coming in 54.5 vs. 55.8 initially estimated and down from December’s 56.2.

The pair has quickly dropped to fresh 3-day lows in the 1.2490/80 band in the wake of the release amidst a generalized offered tone around  the British Pound.

In fact, GBP stays under increasing pressure after the BoE left its monetary stance unchanged at yesterday’s meeting, while Governor M.Carney stressed that rates could go in any direction in the next months. Carney also emphasized that the central bank’s extra stimulus following the Brexit vote has so far worked.

GBP/USD levels to consider

As of writing the pair is retreating 0.31% at 1.2485 and a breakdown of 1.2428 (55-day sma) would open the door to 1.2410 (low Jan.31) and finally 1.2395 (20-day sma). On the other hand, the next resistance aligns at 1.2538 (high Feb.3) followed by 1.2680 (high Feb.2) and then 1.2729 (high Dec.13 2016).