The GBP/USD currency pair on Wednesday extended Tuesday’s gains to retest the current monthly highs of 1.4007. It later pulled back to settle below the 1.3960 level following the release of the latest US ISM Services PMIs.
The currency pair continues to trade within a sharply descending channel formation in the 60-min chart. It is now pinned next to the 100-hour SMA while the 200-hour SMA is a few levels below. The pair has pulled back to trade below the 38.20% fib level from February highs.
GBP/USD Fundamentals Overview
From a fundamental perspective, the GBP/USD currency pair is trading at the back of a relatively busy period in both markets. On Wednesday, the US ISM Services PMI for February missed the expectation of 58.7 with 55.3. The ISM Services New Orders Index also came short of 55.4 with 51.9 while the IS Services Prices Paid beat 64.7 with 71.8.
The Services Employment Index also outshone the expectation of 51.7 with 52.7. The US Markit Services PMI for February also came in better than expected with 59.8 versus 58.9 while the Markit PMI Composite beat 58.8 with 59.5. On the other hand, the ADP Employment Change for February missed 177k with 117k jobs.
In the UK, the Markit Manufacturing PMI for February beat the expectation of 54.9 with 55.1. On the other hand, the Services PMI Missed 49.7 with 49.5. Elsewhere, Mortgage Approvals for January beat the expected count of 96k with a tally of 99k. But consumer credit for January came short of expectations.
GBP/USD Technical Analysis (the 60-min Chart)
Technically, the GBP/USD currency pair appears to be trading within a descending channel formation in the 60-min chart. It has now dropped to trade below the 38.20% fib level. It continues to trade close to the overbought levels of the 14-hour RSI.
The bulls will be targeting short-term rebound profits at around 1.4007 or higher at 1.4080. On the other hand, the bears will look to extend the current downward movement towards 50% and 61.80% fib levels at 1.3901 and 1.3822, respectively.
GBP/USD Technical Analysis (the Daily Chart)
In the daily chart, the GBP/USD currency pair appears to be trading within a gently ascending channel formation. This indicates a significant long-term bullish bias in the market sentiment. The recent pullback pushed it back from overbought levels of the 14-day RSI to the normal trading zone.
The bulls will target long-term profits at around 1.4168 or higher at 1.4381. On the other hand, the bears will look to pounce for pullbacks at around 1.3757 or lower at 1.3537.