GBP/USD extends post-UK PMI downslide farther below 1.33 handle

The GBP/USD pair extended disappointing UK data-led downslide and dropped to over two-week lows, in the 1.3270-65 region. 

The latest UK manufacturing PMI print, slowing to 55.9 in September as compared to previous month's 56.9, indicated that the economy could be losing momentum and weighed heavily on the British Pound. 

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Adding to this, growing optimism over the prospects for additional Fed rate hike move in 2017, and Trump's proposed tax cuts, underpinned the US Dollar demand. 

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Moreover, surging US Treasury bond yields remained supportive of the prevalent bullish sentiment surrounding the greenback and further collaborated to the pair's sharp slide to its lowest level since Sept. 14.

Next in tap would be the release of US ISM manufacturing PMI, which is surprises on the upside could pave way for extension of the pair's corrective slide from yearly tops touched on Sept. 20.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The GBP/USD pair has broken a major support, now the immediate resistance, the 61.8% retracement of the latest bullish run, at 1.3340, an indication that the ongoing decline will likely continue during the upcoming sessions. In the 4 hours chart, technical readings favor such decline, as indicators have accelerated south below their mid-lines, whilst the 20 MA keeps falling and capping the upside, now converging with the 50% retracement of the same rally around 1.3400. An advance beyond this last should take off the bearish pressure, but seems unlikely in the short term. To the downside a break below the 1.3300 figure should favor a slide down to 1.3250, en route to 1.3210."