GBP/USD consolidates losses around 1.3240, near 3-week lows

The pound fell across the board on Tuesday weakened by another round of UK data. The Construction PMI dropped below the 50 line for the first time in more than a year to 48.1 in September from 51.1. Yesterday, the Manufacturing PMI showed lower-than-expected numbers. Cable continues to trend lower amid a decline in the expectations of a rate hike from the Bank of England.

GBP/USD fell for the third day in a row. The pair bottomed at 1.3220, the lowest since September 14. Since the American session GBP/USD has been moving in a small range between 1.3265 and 1.3235, on a quiet session with low volatility. 

On Wednesday, more data is due from the UK with the Service PMI index. IN the US, the first set of data from the labor market will be released with the ADP employment report. 

Technical outlook 

“Technically, the bearish momentum decelerated according to readings in the 4 hours chart, but the downward risk persists, as indicators are consolidating within overbought territory, whilst the 20 SMA extended its decline above the current level, now converging with the 61.8% retracement of the latest bullish run, at 1.3340,” said Valeria Bednarik, Chief Analyst at FXStreet. 

According to her a break below 1.3220, will likely result in a full retracement, with the pair falling down to 1.3146 (Sep 14 low).