GBPUSD Slides After US Data

As of writing, the GBPUSD pair slid below the key bullish support trend line, likely switching the near-term trend to bearish.

Services sector mixed

Analysts anticipated that both services surveys would show more significant declines after ISM and S&P Global Manufacturing Surveys continued to indicate sustained weakness in July. They were right, and they were wrong.

In July, the S&P Global US Services PMI decreased from 52.7 to 47.3. (slightly above the flash print of 47.0). Since June 2020, the contractionary signal has never been lower. On the other hand, the ISM Services increased in July from 55.3 to 56.7. (well above the 53.5 expected)

"US economic conditions worsened markedly in July, with business activity falling across both the manufacturing and service sectors. Excluding pandemic lockdown months, the overall fall in output was the largest recorded since the global financial crisis and signals a strong likelihood that the economy will contract for a third consecutive quarter." Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said.

Short-term skewed to downside

The critical resistance for GBPUSD is near the psychological level at 1.2200. If buyers successfully push the price over that mark and hold it there, more rises toward 1.2275 and 1.2300 (another psychological threshold) may be seen.

On the downside, the Initial support for the downside is around 1.2160 - an ascending trend line from mid-July, which serves as an essential level—below that zone, defending 1.2100 (a psychological level) and 1.2085 will be a must for bulls.