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GBP/USD above 1.5300

FXstreet.com (London) - GBP/USD is open in the European session sitting above 1.5300 the figure.

The pair have extended last weeks on the first day of this week when disappointing economic data for the US was released in the form of ISM (49.0 vs 51.0 expected) and the dollar was sold of across the board.

Research teams at Commerzbank noted the move and have said GBP/USD’s corrective rebound has reached 1.5373 (61.8% retracement) and they must allow for an extension to 1.5476 (78.6% retracement) ahead of failure. Near term strength is viewed as corrective only and they will maintain an overall negative bias while capped by the 1.5601 May high.

Fundementally, the economic calandar has two releases in focus coming up for the pair, and for GBP, the markets are looking for the construction PMI to rise from 49.4 to 49.8 in May. TD Securities research teams have said that with the strength we’ve seen in other PMIs across Europe (including the UK’s manufacturing PMI) suggests that we should see a rise to above 50. For the dollar, the US trade could widen modestly in April as the lagged impact of the strengthening dollar tempers export activity and could push overall non-petroleum imports higher. However, the overall rise in the deficit will be tempered by weaker energy prices, which should lower the energy import bill.

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