Sterling is trading lower versus the dollar, while showing a small gain versus on the underperforming euro. The pound has significantly underperformed this past week, having posted declines against the dollar, yen and even the euro. The UK’s service sector, which makes up the bulk of the economic activity in the United Kingdom, came to the rescue after disappointing PMI outcomes in the manufacturing and construction sectors this week. The service sector drove the composite PMI to 55.8, up from 55.4 in October and beating the consensus forecast for 55.0.
Cable on Wednesday dove below Monday’s 1.4991 low on route to a seven-month at 1.4895, since settling in the low-to-mid-1.49s. The year’s low is at 1.4563, which was seen in April, and is the lowest point traded since mid-2010. Resistance is now marked near former support at 1.4991 and then against at the 20-day moving average at 1.5127.
Momentum on the GBP/USD is negative with the MACD (moving average convergence divergence) index printing in the red with a downward sloping trajectory that is points to a lower exchange rate. The relative strength index (RSI) moved lower with price action reflecting accelerating negative momentum while printing a reading of 32, which is just above the oversold trigger level of 30, which is in the lower end of the neutral range.
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