On Thursday morning, the GBP/USD found support in the 38.20% Fibonacci retracement level at the 1.2190 level.
By mid-day the rate was testing the combined resistance of the 55 and 200-hour simple moving averages at 1.2240. Future forecasts were based upon what would happen at this level.
UK Purchasing Manager's Indices
The British Pound traded sideways against the US Dollar, following the UK Flash PMIs survey results release on Thursday at 08:30 GMT. The GBP/USD exchange currency rate gained 8 pips or 0.06% after the release. The Pound continued trading at the 1.2230 level against the Greenback after the release.Markit released the UK Manufacturing PMI survey results, which came out better-than-expected of 40.6 compared with the forecast of 35.1.
According to the official release: "Rapid downturn in the UK private sector output continues in May, but the speed of decline eases since April. Lower volumes of business activity were again almost exclusively linked to business shutdowns, cancellations of customer orders and a general slump in demand amid the coronavirus disease 2019 (COVID-19) pandemic."
Market Reaction
Economic Calendar
On Friday, the UK Retail Sales data will be published at 8:30 GMT.
In addition, Markit is going to publish the US Flash Manufacturing PMI survey results on Thursday, May 21, at 13:45 GMT.
17.05-23.05 Event Historical Reactions
GBP/USD short-term review
Note that the currency pair is pressured by the 55– and 200-hour SMAs near 1.2240. Thus, some downside potential could prevail, and the pair could decline.However, if the Fibo 38.20% at 1.2190 holds, it is likely that the British Pound could trade sideways against the US Dollar in the short run.
On the other hand, in the case of the SMAs failing, the pair could once again test the resistance of the monthly pivot point at 1.2292.
Hourly Chart
On the daily candle chart, it can be spotted that the 55-day simple moving average is strengthening the resistance of the weekly R1 pivot point at 1.2333.
Daily chart
Read More: Technical Analysis
Traders remain long on GBP/USD
On Wednesday, the sentiment on the Swiss Foreign Exchange was 57% long.
By the middle of Thursday the sentiment was 59% long.
By the middle of Thursday the sentiment was 59% long.