The GBP/USD pair is facing further downside pressure as it retreats towards the 1.3100 level in the European trading session on Tuesday. The technical analysis suggests that sellers are currently in control, with a focus on the upcoming August ISM Manufacturing PMI data from the US. With trading conditions returning to normal after the Labor Day holiday in the US, the US Dollar is benefiting from a souring risk sentiment, leading to a bearish opening in Wall Street.
The GBP/USD pair has taken a negative turn, breaking below a steep support trendline that had been holding back the pullback from the recent high of 1.3265. A continued decline below the 1.3100 level could trigger more selling pressure towards key support levels such as the 23.6% Fibonacci retracement at 1.3040 and the 20-day simple moving average at 1.3000. If the bearish momentum persists, the pair could target the 38.2% Fibonacci level at 1.2900 and the 50-day SMA. Further downside movement could confirm a continuation towards the ascending trendline from 2022 around the 50% Fibonacci level and the 1.2775 level.
It is important for traders to monitor key technical levels and indicators to gauge the potential direction of the GBP/USD pair in the near term. Factors such as economic data releases, market sentiment, and geopolitical developments can also influence the currency pair’s movement. As the US Dollar continues to benefit from a risk-off environment, the GBP/USD pair may face further downside pressure in the coming days.
Traders should pay attention to the upcoming release of the August ISM Manufacturing PMI data from the US, as it could provide further insight into the health of the US economy and impact the direction of the US Dollar. Additionally, market participants should keep an eye on any developments related to Brexit negotiations and the ongoing COVID-19 pandemic, as these factors can also impact the GBP/USD pair’s performance.
In conclusion, the GBP/USD pair is poised for further downside as sellers retain control and the US Dollar strengthens in a risk-off environment. Traders should remain vigilant and monitor key technical levels and economic data releases to make informed trading decisions in the volatile currency market.
