The GBP/USD price drifted lower as technical chart patterns pointed to more weakness.
It pulled back to 1.2260 after it rose to a monthly high of 1.2452 on Monday. Chart patterns point to more downside ahead of the upcoming US GDP andThe British pound retreated after the S&P published weak manufacturing and services PMI numbers. In the UK, flash services PMI declined from 49.9 in December to 48 in January. That decline was worse than the median estimate of 49.6. The manufacturing PMI rose slightly to 46.7 but remained below the expansion area of 50.
This increase was attributed to more government spending coupled with high-interest rates. Borrowing surged to the highest point in 30 years. Sterling also formed a rising wedge pattern that is shown in pink. Most recently, it has formed a small head and shoulders pattern, which is usually a sign of a reversal. The Awesome Oscillator moved below the neutral point.
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