GBP/USD has been on a downtrend for a month now as the United Kingdom struggles with the third wave of coronavirus. The country has marked a one-year anniversary of Covid-19 lockdown. Since the onset of the disease, it has recorded over 126,000 coronavirus-related deaths. This places it at the top in the European continent and fifth in the world.
However, the pound is finding support from the better-than-expected PMI figures. The manufacturing PMI reading of 57.9 is higher than the forecasted 55.0 and previous month’s 55.1.
Later on, GBP/USD will be reacting to the US PMI data. Analysts expect a US manufacturing PMI reading of 59.3 compared to February’s 58.5. If the actual figure beats the estimates, it will strengthen the greenback further; exerting additional pressure on the pound.
GBP/USD Technical Outlook
With an RSI of 29.57, GBP/USD is headed to the oversold territory. As such, it is likely to undergo an upward correction. Currently, the pair is seesawing around 1.3700. A drop beyond that level will confirm the continuation of a downtrend that may last for several sessions. If that happens, the bears will test the lower level of 1.3600, which was last hit in early February.
Even with the upward correction, the uptrend will only be evident when the 25-day exponential moving average crosses over the 100-day EMA to the upside. In the near-term, the target will be the prior support-turn resistance level of 1.3801. If GBP/USD manages to break that resistance, the next level to watch out for is the psychological 1.3900. past this point, an uptrend will be evident.