The Great Britain pound lost strength and trimmed gains against the U.S. dollar on Monday, after data showed that service sector activity in the U.K. expanded at a slower rate than expected last month, dampening optimism over the strength of the economy.
Research group Markit said its U.K services purchasing managers’ index fell to 53.3 in September from a reading of 55.6 the previous month. Analysts had expected the index to rise to 56.0 last month which weakened the currency.
Initial bias remains on the downside as 21 and 55 EMA converges at the moment and a divergence to the downside is expected. Also SSRC and MACD oscillator is showing signs of more bearish momentum is to be continued in the pair and a retest of 1.5123/1.5088 demand zone is expected. A sustained break of 1.5088 low would bring further decline in the pair to 1.5041 weekly support.
Tomorrow investors would be taking a close look at USD Trade Balance.