FxWirePro: GBP/USD slips as dollar extends gains after US PMI data

• GBP/USD slipped  sharply lower lower on Tuesday as the dollar strengthened on expectations of further U.S. interest rate hikes.

•The dollar extended its gains after S&P Global reported that the flash U.S. Composite PMI Output Index rose to 58.4 this month from 56.0 in August, marking its highest level since July 2021.

•The Federal Reserve last week raised its benchmark rate by 25 basis points to 3.75%-4.00% and signalled that another increase could come before year-end.

• The S&P Global UK Services PMI fell to 51.7 in September from 52.5 in August, hitting a three-month low, preliminary data showed. Economists polled by Reuters had expected a reading of 52.0.

• Money markets are pricing UK interest rates at around 4.75% in a year, roughly one percentage point above the current 3.75% rate, implying four quarter-point hikes over the period.

•   Immediate resistance is located at 1.3355(38.2%fib), any close above will push the pair towards 1.3404(Sep 18th high)

•  Strong support is seen at 1.3218(Lower BB) and break below could take the pair towards 1.3169(23.6%fib)

  Recommendation: Good to sell around 1.3250  with stop loss of 1.3360 and target price of 1.3180