GBP/USD falls 0.5% ahead of global PMI release

GBP/USD fell another 0.5% on Wednesday, falling to a fresh ten-week low and approaching the 1.2900 mark. Purchasing managers' indexes from the UK and the US will be released on Thursday, and investors will focus on speeches by officials from the Bank of England (BoE) and the Federal Reserve.

Sterling fell sharply on Wednesday, adding to its losses as sterling markets buckled under the weight of a broad rebound in the dollar and as investors worried about overall weakness in the U.K. Purchasing Managers' Index (PMI) for October.

Median forecasts expect UK economic activity data to fall slightly, with services PMI expected to fall to 52.2 in October from 52.4 previously. In the United States, the median market forecast predicts that the U.S. purchasing managers index data in October will be mixed, with the manufacturing sub-score expected to rise from 47.3 to 47.5, while the services purchasing managers index sub-score is expected to fall slightly from 55.2 to 55.0.

GBP/USD Price Forecast

GBP/USD extended its bearish momentum and fell to 1.2910 levels, maintaining downward pressure. GBP/USD last fell below the 50-day exponential moving average at 1.3079, showing that bears remain in control. The next support to note is the 200-day exponential moving average at 1.2847. A break below this level could signal further decline towards the 1.2800 psychological level. Recent moves have shown a series of lower highs and lower lows, confirming the bearish trend that has developed since the October highs.

The Moving Average Convergence and Divergence further confirms this bearish sentiment, with the MACD line crossing below the signal line and the bar deepening into the negative zone. This suggests that selling pressure is likely to continue in the short term, with few signs of a bullish reversal. However, if GBP/USD can hold the 200-day exponential moving average and rebound closer to the 50-day exponential moving average, it may strengthen in the short term. Traders should remain cautious as the overall trend points to further downside risks unless key support levels can be held.