GBP/USD Forecast: Bearish Momentum to Accelerate Below 1.4400
The British Pound has extended its decline this Wednesday, unimpressed by the release of UK data, as May Markit Manufacturing PMI came in at 50.1 from the flash estimate of 49.2 released earlier this month. Although the figure took the kingdom out of recessionary levels, it still shows that the manufacturing sector remains subdued. Mortgage approvals shrunk to 66.25K from previous 71.36K, missing expectations in April.
The GBP/USD pair trades near the daily low set at 1.4449, and the 4
hours chart shows that is unable to recover above the 200 EMA, a strong
dynamic resistance around 1.4490. Furthermore, the technical indicators
keep heading lower near oversold readings, whilst the 20 SMA has turned
sharply lower well above the current level, reflecting the strong
selling interest surrounding the pair.
May 23rd daily low at 1.4400 is the level to break now to confirm a new
leg lower, with the next intraday supports at 1.4365 and 1.4330. Up to
1.4500 on the other hand, selling interest will likely prevail, with
only a recovery beyond 1.4520 denying further slides for today.