It falls below 1.3100 on mixed US ISM data

• GBP/USD slips below 1.3100 despite RSI giving mixed signals.
• RSI is trending bullish, but momentum is shifting to the sellers, dropping to neutral.
• A break below 1.3100, GBP/USD could test the July 17 high at 1.3043; further declines may reach 1.3000 psychologically, then 50-DMA at 1.2894.
• The bullish trend resumes if GBP/USD holds above 1.3100, breaking the September 2 peak at 1.3155, targeting the top of the channel at 1.3200.

GBP/USD reverses, sinking in early trade on Tuesday during the North American session, losing around 0.20% and trading at 1.3099, below the 1.3100 mark.

US ISM manufacturing PMI for August missed estimates, suggesting the economy is cooling due to Fed tightening. However, an employment subcomponent of the report showed a slight improvement, which could be a prelude to Friday’s nonfarm payrolls report.

GBP/USD Price: Technical Insights

GBP/USD slipped sharply on the data release, on course to break the 1.3100 mark. The Relative Strength Index (RSI) remains bullish, but the momentum has been in favor of the sellers as the RSI aims lower, approaching its neutral level.

If GBP/USD breaks below 1.3100, this could clear the way to test support at 1.3043, the highest since July 17. A break below could see the pair test 1.3000, and if breached, the 50-day moving average (DMA) would rise to 1.2894.

If the bulls want to stay in charge, they need to hold GBP/USD above 1.3100. For a resumption of the uptrend, clear the September 2 peak at 1.3155 before challenging the top line of the ascending channel at 1.3200.

GBP/USD Price Action – Daily Chart