GBP/USD Forecast – British Pound Could Accelerate Declines Vs US Dollar
- – The British Pound declined sharply and broke the 1.3710 support against the US Dollar.
- – There is a crucial bearish trend line formed with resistance at 1.3640 on the hourly chart of the GBP/USD pair.
- – Recently in China, the Caixin Manufacturing PMI for April 2018 was released.
- – The outcome was above the forecast of 50.9 as there was a rise in the PMI from 51.0 to 51.1.
China’s Caixin Manufacturing PMI
Recently in China, the Caixin Manufacturing PMI for April 2018 was released. The market was positioned for a decline in the PMI from the last reading of 51.0 to 50.9.
The actual was above the forecast of 50.9 as there was a rise in the PMI from 51.0 to 51.1. There was a decent rise in the output pace, but new order growth was on a weaker side. The report added that:
Manufacturing production in China continued to increase during April. That said, the rate of expansion was modest, despite picking up slightly since March. According to panellists, output was raised in line with higher new order inflows.
The GBP/USD pair is currently in a bearish zone and it may continue to face selling pressure below 1.3640 in the near term.
GBP/USD Technical Analysis
The British Pound faced a lot of selling pressure recently and started a major decline from the 1.3960 swing high against the US Dollar. The GBP/USD pair tumbled and broke many supports such as 1.3800 and 1.37140 to settle below the 100 hourly simple moving average.
The pair even broke the 1.3600 support area and traded as low as 1.3587. It is currently consolidating losses with an initial resistance around the 23.6% Fib retracement level of the last decline from the 1.3785 high to 1.3587 low.
There is also a crucial bearish trend line formed with resistance at 1.3640 on the hourly chart of the GBP/USD pair. The same trend line is close to the 38.2% Fib retracement level of the last decline from the 1.3785 high to 1.3587 low.
Therefore, if the pair corrects higher from the current levels, it is likely to face sellers near the 1.3635 and 1.3640 levels in the near term.
Also published on Medium.
