At the start of the European session on Tuesday, the GBP/USD was down due to the manufacturing PMI not reaching expectations. Then the rate hastened downwards for the euro due to a growth in the dollar rate. From 1.5359, the rate returned to session opening price after the manufacturing PMI data came out showing a fall in manufacturing orders.
Due to yesterday’s sharp bounce, on the daily the balance is tipped in favor of the buyers. Ideally we’d like to see a rebound to 1.5398 and then a growth to 1.5496. However, going off the daily, selling, not buying, the pound looks more appealing. It’s likely that the rate will fall as we wait for the service PMI. I expect to see the rate at 1.5360 at the American session.
On Monday a false break in the trend line took place. The line has now been corrected according to a 1.5496 maximum. The stochastic has flipped upside down. A triangle pattern has formed so I’m looking at the GBP falling to 1.5288.
The situation is unclear. I’m saying a break of 1.52 with a 1.5080 target.