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Aug 21 - 11:55 AM

COMMENT - EUR/USD's PMI Pain Adds To Sterling's Brexit Troubles

By Paul Spirgel  —  Aug 21 - 10:40 AM

GBP/USD tumbled in U.S. trade as disappointing Brexit talks nL8N2FN1YF combined with a dollar-boosting EUR/USD slide -- following below-forecast euro zone PMI nL8N2FN1ZJ -- to shift the near-term momentum to sterling bears.

The losses knocked the pound down to 1.3069 from the overnight high of 1.3255, with EUR/USD flows remaining the key GBP/USD driver after it rallied with the euro on the way up and now faces headwinds now that stretched long positioning in the single currency unwinds nL1N2FM0V8.

Sterling IMM spec positioning had moved near flat as the pound rallied to new trend highs by 1.3276 on Tuesday, creating an opportunity for GBP/USD specs to reload shorts near the peaks.

GBP/USD probed below the 10-day moving average by 1.3100, finding firm support ahead of its 21-DMA by 1.3065.

The pound's Aug.
18-21 failures above 1.3200, indicate bulls may be losing resolve.
A break below minor Fibo support by 1.2894 and the Aug. 4 low by 1.2982 would increase risks of a reversal of recent gains, putting multiple DMA support levels and daily lows down to July 17's 1.2512 low in focus.

For more click on FXBUZ

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary


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