The GBP / USD pair is declining on Tuesday amid the strengthening of the dollar, but the fundamental background for the currency pair remains mixed. The American currency remains vulnerable after the publication of unexpectedly weaker PMI data for the manufacturing sector for April. Slower manufacturing activity could indicate that the US economic recovery will be uneven and slow despite strong stimulus measures.
Additional pressure on the dollar may be exerted by the dynamics of the movement of the American Treasuries. The yield on securities is declining.
In the UK today, the focus will be on manufacturing PMI data. Data is expected at the level of preliminary values - 60.7 points.
Bullish signals predominate locally on the chart. The currency pair tested intraday support at 13870. From the current levels, we can expect the development of an upward movement with a target at 1.3950.
· Resistance levels: 1.3950, 1.3980, 1.4000;
· Support levels: 1.3870, 1.3757, 1.3660.
The main scenario is growth from current levels to 1.3950.
An alternative scenario is a breakdown of the support at 1.3870 and a decline in the direction of 1.3757.
The current fundamental background is neutral. We are considering longs from the level of 1.3870.