- The GBP/USD tumbled on a dovish BoE on Thursday.
- Mixed PMIs for the US saw the USD take a step back, but Pound Sterling traders couldn’t capitalize.
- UK retail sales missed the mark, keeping the GBP in a bearish stance.
The GBP/USD is looking for further downside to end the trading week, probing chart space below 1.2250 heading into the final hours of Friday’s trading session.
The UK’s Bank of England (BoE) came in dovish this week after British inflation came in much lower than previously anticipated. The BoE held its benchmark rate at 5.25%, waffling on a market-expected 25-basis-point increase to 5.5%.
UK retail sales on Friday missed expectations, printing at 0.4%. The figure rebounded from the previous reading of -1.1% but failed to capture the market forecast of 0.5%.
The UK Purchasing Manager Index (PMI) figures are mixed towards the downside, capping any upside potential for the Pound Sterling (GBP).
The preliminary UK S&P Global/CIPS Composite PMI for September declined to 46.8, missing the expected increase of 48.7. The previous month’s PMI came in at 48.6.
The manufacturing component of the UK PMI came in better than expected at 48.9 versus the forecast 48.0, but the services sector PMI declined to 47.2 compared to the forecast 49.2.
On the US side, PMI also came in mixed. The composite ticked lower to 50.1 from 50.2. The manufacturing PMI jumped to 48.9 from the previous 47.9, while the services component slipped to 50.2 from 50.5 walking back the expected uptick to 50.6.
GBP/USD technical outlook
The Pound Sterling continues to struggle against the US Dollar, with the GBP/USD down almost 1.5% from the week’s high near 1.2425.
The pair briefly pierced the 100-hour Simple Moving Average (SMA) on Wednesday but has fallen to the downside, now trading beneath the 34-hour Exponential Moving Average (EMA), which is currently drifting to the low side of 1.2280.
Daily candlesticks have the GBP/USD piercing the 200-day SMA just above 1.2400, and continued downside will see the pair set to challenge six-month lows, with little technical support between current prices and 2023’s lows near 1.1825.