The GBP/USD currency pair on Thursday pulled back off session highs of about 1.2800 to trade at about 1.2655 after the BoE’s interest rate decision. The currency pair appears to be trading within a sharply descending channel formation in the 60-minute chart.
The pair has now plummeted to trade below the 100-hour moving average line. As a result, the currency pair has descended into the oversold levels of the 14-hour RSI.
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 Thursday, the Bank of England voted to keep the base interest rate unchanged at 5.25% in line with expectations.
The preliminary S&P Global/CIPS Manufacturing PMI for March outperformed the expectation of 47.8 with a reading of 49.9. The preliminary Services PMI for the period missed 53.8 with a reading of 53.4, while the Composite PMI fell short of 53.1 with 52.9. Earlier in the week, the UK CPI for February missed forecasts of 0.7% (MoM) and 3.6% (YoY), with changes of 0.6% and 3.4%, respectively.
In the US, the preliminary S&P Global Manufacturing PMI for March beat the estimate of 51.7 with a reading of 52.5, while the Services PMI missed 52 2ith 51.7. The initial jobless claims for the week ending March 15 exceeded expectations of 215k with a lower tally of 210k. The Philadelphia Fed Manufacturing Survey for March also outshone the forecast of -2.3 with a reading of 3.2, down from 5.2 in the previous update.
GBP/USD Technical Analysis (the 60-min Chart)
Technically, the GBP/USD currency pair appears to be trading within a sharply descending channel formation in the 60-minute chart. The 14-hour RSI also seems to support a short-term bearish bias after entering oversold conditions.
Therefore, the bears will be targeting extended declines at about 1.2609 or lower at 1.2558. On the other hand, the bulls will be targeting potential rebounds at about 1.2706 or higher at 1.2753.
GBP/USD Technical Analysis (the Daily Chart)
In the daily chart, the GBP/USD currency pair appears to be trading within a sideways channel formation. However, the 14-day RSI has recently pulled back to avoid rallying into overbought conditions.
Therefore, the bears will be targeting extended pullbacks at about 1.2498 or lower at 1.2319. On the other hand, the bulls will look to pounce on profits at about 1.2818 or higher at 1.2978.