GBP/USD has been quite impulsive, trading lower since it bounced off the 1.4375 area recently. This led the price towards 1.37 support area. The price is currently residing at the edge of 1.37 and it is expected to proceed much lower in the coming days. Ahead of the upcoming NFP, Average Hourly Earnings and Unemployment Rate report on Friday which are likely to reveal upbeat readings, USD is already quite strong against GBP. Today, the UK Manufacturing PMI report is going to be published with a decrease to 53.9 from the previous figure of 54.9 which was expected to have a slight decrease to 54.8, Net Lending to Individuals decreased to 4.2B from the previous figure of 5.5B which was expected to be at 4.9B, M4 Money Supply also decreased to -1.4% from the previous value of -0.4% which was expected to increase to 0.2%, and Mortgage Approvals report was published as expected with a decrease to 63k from the previous figure of 64k.
On the other hand, today US Final Manufacturing PMI report is going to be published which is expected to remain unchanged at 56.5, ISM Manufacturing PMI is expected to decrease to 58.4 from the previous figure of 59.3, Construction Spending report is expected to increase to 0.5% from the previous value of 0.1%, ISM Manufacturing Prices is expected to increase to 78.3 from the previous figure of 78.1, and Total Vehicle Sales report is expected to decrease to 17.1M from the previous figure of 17.5M.
As for the current scenario, GBP has been affected by the downbeat economic reports today which pushed the price more downward amid impulsive bearish pressure. On the other hand, the forecasts for the upcoming USD economic reports are quite mixed which might lead to certain correction and higher volatility in the pair. To sum up, certain correction is expected to persist in the pair for a short period before the price pushes much lower, adding the gains on the USD side in the future.
Now let us look at the technical chart. The price is currently residing the below the 1.37 price area which was an important level of support. The pair is having a Bearish Divergence since the price bounced off the 1.4275 area, the bearish pressure is currently expected to push the price much lower in the coming days with a target towards 1.3300-20 support area. As the price remains below the resistance area of 1.3850-1.3950 area, the bearish bias is expected to continue further.
