GBPUSD 05-03-2018 – Daily Forex Market Preview
Italian elections were held on Sunday with early exit polls indicating a hung parliament as widely expected. Full counting of votes is expected to be completed only by 2pm CET following which the results will be officially announced.
In anticipation of the election outcome, the markets are seen moving to a risk off sentiment. Gold prices which had weakened last week posted a strong reversal toward Friday’s close.
Looking ahead, on the economic front, data from the Eurozone will see the release of the services PMI from various regions. The final services PMI data for the Eurozone is expected to show an unchanged print with an estimated reading of 56.7 for February. This was the same reading in the services PMI in January.
Data from the UK will see the release of the services PMI data. Economists forecast that services activity in the region rose slightly to 53.3, up from January’s 53.0. Services data continues in the U.S. trading session. Markit’s final services PMI is forecast to show an unchanged print at 55.9 while ISM’s non-manufacturing PMI is expected to fall to 58.9, down from 59.9 that was registered in January.
GBPUSD intra-day analysis
GBPUSD (1.3790): The British pound managed to post some modest gains on Friday following the reversal on Thursday. However, the downside breakout from the triangle pattern on the 4-hour chart indicates that the bias is to the downside. The currency consolidation in price suggests a bearish flag pattern that is emerging. This could indicate GBPUSD targeting the support level near 1.3611 – 1.3589 in the near term if the bearish flag pattern can be validated.