GBP/USD faces downward pressure on weak UK data, sentiment deterioration

GBP/USD reached a three-day low of 1.2113, as sellers target 1.2100 for the next support.
US economic data paints a solid economy, with New Home Sales rising 12.3% in September.
UK data shows Manufacturing PMI remains in recessionary territory, and the labor market is easing.

Christian Borjon Valencia FXStreet

GBP/USD prolonged its losses for two consecutive days after the pair reached a two-week high of 1.2288 but failed to crack the 1.2300 mark. Fundamental news and geopolitical risks weighed on the Pound Sterling (GBP). At the time of writing, the pair trades at 1.2116, down 0.35%.

Geopolitical risks and weak UK data, a headwind for the GBP/USD

Risk aversion continues to drive the financial markets. Newswires revealed that Israeli Prime Minister Benjamin Netanyahu is preparing its army for a ground offensive, recommending civilians in Gaza to head south. He added he would not give details, and the time of the invasion would be reached by consensus.

Earlier in the New York session, US economic data continued to paint a solid economy in the country. The US Census Bureau revealed that New Home Sales were above August’s figures, with September sales rising 12.3%, compared to the former -8.2% plunge. On Tuesday, S&P Global revealed that business activity in manufacturing and services continues to expand despite 525 bps of tightening by the US Federal Reserve (Fed).

The Pound Sterling (GBP) remains on the backfoot after S&P Global reported that Manufacturing PMI remains in recessionary territory, while employment data indicates the labor market is easing. Growing speculations that the Bank of England (BoE) would keep rates unchanged at 5.25% at the upcoming November 2 meeting increased

Overall, the GBP/USD could extend its losses towards the 1.20 handle, as the economy docket in the United States (US) would feature Q3 Gross Domestic Product (GDP), Durable Good Orders, and unemployment claims. If US GDP comes above expectations, that could trigger further downside on the GBP/USD.

GBP/USD Price Analysis: Technical outlook

The GBP/USD remains downward biased, and it could accelerate its downtrend once it breaks below the October 19 low of 1.2089. A breach of the latter will expose October’s low of 1.2037 before the pair tests March 15 low of 1.2010. Conversely, if the major remains above 1.2100, that could keep buyers hopeful of reclaiming 1.2200.

GBP/USD

Overview
Today last price	1.2116
Today Daily Change	-0.0044
Today Daily Change %	-0.36
Today daily open	1.216

Trends
Daily SMA20	1.2184
Daily SMA50	1.2389
Daily SMA100	1.2582
Daily SMA200	1.2443

Levels
Previous Daily High	1.2289
Previous Daily Low	1.2154
Previous Weekly High	1.222
Previous Weekly Low	1.209
Previous Monthly High	1.2713
Previous Monthly Low	1.2111
Daily Fibonacci 38.2%	1.2205
Daily Fibonacci 61.8%	1.2237
Daily Pivot Point S1	1.2113
Daily Pivot Point S2	1.2065
Daily Pivot Point S3	1.1977
Daily Pivot Point R1	1.2248
Daily Pivot Point R2	1.2336
Daily Pivot Point R3	1.2384

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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