We recommended selling GBP/USD from every upward level, as the pressures on sterling remain stronger.

• The increase in global geopolitical tensions has restored the US dollar to its status as safe havens asset.
• As a result, the GBP/USD currency pair has returned to its broader downtrend, with losses towards the support level of 1.2076 at the time of writing this analysis.
• This is after giving up this week's gains, which reached the resistance level of 1.2288 at that time.

British Pound Back to Its Downward Path

Therefore, we recommended selling GBP/USD from every upward level, as the pressures on sterling remain stronger. Also, the US dollar remains the stronger currency due to the momentum of demand for it as safe havens asset, in addition to the positive economic data results that continue to support the tightening of Federal Reserve policy.

On the economic side, the GBP/USD is trading under the influence of economic data results. New home sales in the United States exceeded expectations of 0.68 million with a total of 0.759 million in September. The change in new home sales for this period was 12.3%, compared to a change of -8.2% in the previous period. On Tuesday, the preliminary S&P Global US Manufacturing PMI for September exceeded expectations at 49.5 with a reading of 50, while the Services PMI exceeded a reading of 49.9 with a reading of 50.9.

In the UK, the change in the number of claimants for September missed expectations of 2.3 thousand with a total of 20.4 thousand, while the claimant count rate rose to 4% from 3.9% in the previous period. On the other hand, the unemployment rate for the three months to 31 August beat expectations of 4.3% at 4.2%, down from 4.3%. The preliminary S&P Global/CIPS Composite PMI for October missed expectations at 48.8 with a reading of 48.6, while the Manufacturing PMI beat expectations of 45 with a reading of 45.2. Finally, the Services PMI for this period declined from 49.5 to 49.2.

GBP/USD Trading Outlook Today

Recently, The GBP/USD is trading slightly below the 100-hour moving average line. As a result, the currency pair appears to be on the verge of entering the oversold zone of the 14-hour RSI. In the short term, and based on the performance of the hourly chart, the GBP/USD appears to be trading within a downtrend channel formation. However, the MACD indicator on that timeframe appears to be struggling for momentum as it approaches a bullish crossover. Therefore, bulls will be targeting potential rebounds around 1.2167 or higher at support 1.2199. On the other hand, bears will be looking to take profits around 1.2080 or lower at support 1.2020.

In the long term, and based on the daily chart's performance, the GBP/USD currency pair appears to be trading within a downtrend channel. However, the daily MACD indicator appears to be losing strength after completing a bullish crossover. Therefore, bears will be looking to extend the current series of declines towards 1.1992 or lower to support 1.1842. shortly, bulls will be looking to take profits around 1.2256 or higher at resistance 1.2397.

(Click on image to enlarge)

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