It falls below 1.3300 on risk-on sentiment

• GBP/USD is down over 0.50% on sour sentiment from Middle East tensions.
• UK manufacturing PMI expanded but slowed, while US ISM manufacturing PMI improved but remained in contractionary territory.
• A break below 1.3300 could see support tested at 1.3266, with further downside risk towards 1.3200 and 1.3145.

Sterling fell against the greenback during the North American session, losing more than 0.50% amid a risk-on mood over heightened tensions in the Middle East. At the time of writing, GBP/USD is trading at 1.3300.

Business activity remains resilient, according to S&P Global, which revealed that September’s manufacturing PMI expanded as expected but slowed from the previous reading. Across the pond, the ISM Manufacturing PMI improved but remained in contractionary territory.

GBP/USD Price: Technical Insights

GBP/USD extended its losses below 1.3300, opening the door for more declines. Sellers are eyeing the August 27 high of 1.3266. In the short-term, the momentum has changed to bearish, as shown by the relative strength index (RSI), which has targeted its neutral line. However, RSI is still in bullish territory.

Once GBP/USD breaks the August 27 high, the next support would be the 1.3200 figure. On further weakness, the next stop would be the September 17 daily low of 1.3145, followed by the 1.3100 threshold.

Conversely, for a bullish continuation, GBP/USD needs to break above 1.3300 and clear the top line of the ascending channel around 1.3380-90.

GBP/USD Price Action – Daily Chart