GBP/USD Slides Further Below 1.4500 Handle on Weak UK PMI
pair's up-move to 1.4530 during Asian session got sold into and the
pair subsequently dropped back below 1.4500 handle to 1.4445.
The latest slew of weaker PMI reading from UK has been the key factor that has dragged the pair by over 300-pips from Tuesday's multi-month high of 1.4770 level. Thursday's services PMI print was no exception to this week's disappointing numbers. The Markit/CIPS UK services PMI for April dropped to 52.0 from 53.7 recorded in March and was well below consensus estimates of 53.5.
The pair has now dropped below yesterday's low and is sustaining its weakness below 38.2% Fibonacci retracement level of 1.4009-1.4770 sharp up-move. Hence, from current levels the pair seems vulnerable to extend its near-term corrective move.
Technical levels to watch
On a sustained weakness below 1.4450 level, additional selling pressure could emerge that could easily drag the pair towards an important confluence support near 1.4400 round figure mark. On a decisive break below this strong support would negate any bullish bias and the pair might resume its medium to long-term downward trajectory.
Meanwhile on the upside, 38.2% Fibonacci retracement level support break-point near 1.4480 level, might now act as immediate resistance. Although momentum above 1.4480 resistance, leading to an up-move beyond 1.4500 psychological mark resistance, could get extended but is likely to be capped at a very important horizontal resistance near 1.4535-40 area.