Bearish view

Bullish view

The GBP/USD pair retreated to a low of 1.2907, its lowest level since August 12. It has dropped by 3.80% from its highest level this year as the US dollar index jumped to a high of $104.56.
 Flash manufacturing and services PMI dataThe GBP/USD pair continued its strong sell-off as traders waited for the upcoming flash manufacturing and services PMI numbers.Economists expect the data to show that the UK manufacturing PMI rose to 51.5, while the services figure moved to 52.3 during the month.If these numbers are correct, it will be a sign that the UK economy is doing modestly well since most countries are seeing a contraction of the manufacturing sector.The report comes a week after numbers by the Office of National Statistics (ONS) published encouraging inflation and retail sales data. Inflation dropped to 1.7% in September from the previous 2.2%. Retail sales were stronger than expected during the month. Therefore, the BoE may opt for gradual easing of interest rates in the next few meetings.The GBP/USD pair will next react to the upcoming flash PMIs from the United States. Analysts expect the numbers to show that the manufacturing PMI remained at 47.5, while the services figure was at 55.The US will also publish the latest new home sales and initial jobless claims data. The jobless numbers are important because the Fed is focusing on the labor market when determining the size of the next interest rate cuts.Economists have started to reprice the Federal Reserve expectations after the strong jobs numbers released last month. There are also concerns about the upcoming general election, which could see Donald Trump go back to the White House.
 GBP/USD technical analysisThe GBP/USD exchange rate has continued its downward trend in the past few weeks. On the daily chart, the pair has moved below the Ichimoku cloud indicator.The pair has moved below the 50-day moving average. It has also moved to the 38.2% Fibonacci Retracement point.Also, the Percentage Price Oscillator (PPO) continued moving downwards and dropped to its lowest level since April. Therefore, the pair will likely continue falling as sellers target the 50% retracement point at 1.2135. A move above the resistance level at 1.3045 will invalidate the bearish view. More By This Author:GBP/USD Forex Signal: Rising Wedge Points To More DownsidesBTC/USD Forex Signal: On The Cusp Of More Upside BTC/USD Forex Signal: Bitcoin Could Still Retest Its All-Time High