GBPUSD fell below 1.2450 during the European session on Wednesday.
GBPUSD lost momentum and fell below this level. The pair’s near-term technical picture indicates. That it has lost its recovery momentum, although buyers may remain interested as long as 1.2400 support holds.
The broad based selling pressure surrounding the US Dollar (USD) boosted. GBPUSD in the second half of the day on Tuesday, helping the pair to break its three-day losing streak.
S&P Global Composite PMI In the United States, the flash estimate for April fell to 50.9 from 52.1 in March. Indicating that private sector business activity expanded at a slower pace. Furthermore, the PMI survey results revealed diminishing price pressures.
“The deterioration in demand and cooling in the labor market fed through to lower price pressures. As April saw a welcome easing in rates of increase for selling prices for both goods and services,” said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.
The March Durable Goods Orders data from the United States will be watched for additional impetus later in the day. Although this has not been a market-moving data recently. The market reaction to Tuesday’s disappointing PMI news indicates that a negative print potentially have an impact on the US dollar.
GBPUSD Technical Analysis
The near-term technical forecast indicates a loss of recovery momentum.
Buyers may remain interested if 1.2400 holds as support.
After advancing sideways above 1.2450 in the Asian session on Wednesday,
The Relative Strength Index (RSI) indicator on the 4-hour chart fell toward 50, indicating a loss of bullish momentum. Additionally, GBP/USD fell near the 50-period Simple Moving Average (SMA), which is currently at 1.2430, after ending the previous three 4-hour candles above this level.
The midpoint of the declining channel serves as the initial support level at 1.2400. If GBPUSD remains above this level, a new leg higher toward 1.2500 (100-period SMA, upper limit of the falling channel) may be seen. On the downside, a 4-hour closure below 1.2400 might pave the way for a longer decline to 1.2350 (static level) and 1.2300 (static level, lower limit of the downward channel).
