The GBP/USD pair crashed in the short term and is now trading at 1.2286 at the time of writing above the 1.2263 daily low. Today, the fundamentals moved the rate. The Pound took a hit from the UK Flash Services PMI which came in at 48.0 points far below 49.6 expected, signaling further contraction.
On the other hand, the greenback received a helping hand from the US data. The Flash Services PMI increased from 44.7 to 46.6 points above the 45.3 expected, while Flash Manufacturing PMI jumped from 46.2 points to 46.8 points even if the traders expected a potential drop to 46.0.
GBP/USD Validates Its Breakdown!
Technically, the rate tested and retested the broken uptrend line confirming its breakdown. Now, it has registered a sharp drop ignoring the weekly pivot point (1.2330), 1.2312, 1.2293, and the median line (ml).
These represented downside obstacles, so closing and staying below these levels may signal a larger drop. The broken obstacles are seen as resistance levels, the rate could try to test and retest them before going down.
GBP/USD Forecast!
A new lower low and bearish closure below 1.2263 today's low activates a deeper drop and brings a selling signal. The descending pitchfork's lower median line (lml) is seen as a downside target.
