GBP/USD hangs near two-month lows, below 1.2700 mark post-UK PMIs

GBP/USD witnessed some follow-through selling for the fourth consecutive session.
Softer UK Services PMI did little to impress bulls or provide any respite to the pair.
The set-up favours support prospect for a slide, even below the 1.2600 round-figure.

Haresh Menghani FXStreet

The GBP/USD pair maintained its offered tone near two-month lows, below the 1.2700 mark and had a rather muted reaction to the UK macro data.

The pair prolonged its recent rejection slide from the key 1.3000 psychological mark and remained under some selling pressure for the fourth consecutive session on Wednesday. Even though the BoE Governor Andrew Bailey downplayed expectations of negative interest rates, the British pound struggled to attract any meaningful buying amid persistent Brexit-related worries.

Adding to this, the UK Prime Minister Boris Johnson announced a slew of new restriction for England to contain a fresh spike in the number of COVID-19 cases. Johnson also warned to introduce greater restrictions if there is no improvement in the pandemic situation, which, in turn, kept the GBP bulls on the defensive through the first half of the trading action on Wednesday.

On the economic data front, the flash version of the Markit UK Services PMI fell short of market expectations and fell to 55.1 for September from 58.8 previous. Separately, flash UK Manufacturing PMI came in at 54.3, matching consensus estimates, albeit was still below the previous month's final print of 55.2 and did little to impress the GBP bulls.

On the other hand, fears of renewed lockdown measures – amid the ever-increasing coronavirus cases – continued driving some haven flows towards the US dollar. A broad-based USD strength exerted some additional pressure and dragged the GBP/USD pair below the very important 200-day SMA for the first time since July.

The pair has now found acceptance below the technically significant moving average and now seems vulnerable to slide further. Hence, some follow-through weakness towards the 1.2600 mark, en-route the next major support near the 1.2550 horizontal support, now looks a distinct possibility.

Technical levels to watch

GBP/USD

Overview
Today last price	1.2699
Today Daily Change	-0.0034
Today Daily Change %	-0.27
Today daily open	1.2733

Trends
Daily SMA20	1.3066
Daily SMA50	1.3008
Daily SMA100	1.2722
Daily SMA200	1.2725

Levels
Previous Daily High	1.2867
Previous Daily Low	1.2711
Previous Weekly High	1.3007
Previous Weekly Low	1.2777
Previous Monthly High	1.3396
Previous Monthly Low	1.2982
Daily Fibonacci 38.2%	1.2771
Daily Fibonacci 61.8%	1.2808
Daily Pivot Point S1	1.2674
Daily Pivot Point S2	1.2614
Daily Pivot Point S3	1.2517
Daily Pivot Point R1	1.283
Daily Pivot Point R2	1.2927
Daily Pivot Point R3	1.2987

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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