GBP/USD reversal intensifies, drops to 1.4620 level

By FXStreet The GBP/USD pair witnessed a sharp reversal from day’s high of 1.4769 on disappointing UK manufacturing PMI data, dropping over 150-pips to currently trade near 1.4625.

Data released earlier on Tuesday showed UK’s manufacturing sector below the critical 50.00 mark that separates contraction from expansion. The Markit/CIPS UK Manufacturing PMI for April unexpectedly dropped to 49.2, marking its lowest level since February 2013. Reading for March was also revised lower to 50.7 from its previous reading of 51.0.

On H4, the pair has been trading within a short-term ascending trend-channel and Tuesday’s sharp reversal dragged the pair below the important trend-channel support near 1.4640-35 area. Hence, from current levels the pair seems more likely to extend its corrective move.

Technical levels to watch

The ongoing reversal movement seems to drag the pair immediately towards 1.4600-1.4590 support area, which if broken could extend the corrective move towards its next major support near 1.4530 level.

On the upside, ascending channel support break-point near 1.4640 level might now act as immediate resistance. Considering that the pair has decisively broken below a well-established ascending trend-channel, any further recovery beyond 1.4640 might now be capped at 1.4675-80 horizontal resistance area.
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Source:: FX Street