GBP/USD slides on weaker-than-expected PMIs. Economists at Scotiabank analyze the pair’s outlook.

The 1.2620 level is now key support

Weaker-than-expected UK data reflected a slump in services – to 48.7 in August from 51.5 in July. The flash composite index dropped to 47.9 this month, down from 50.8. 

The 1.2620 level is now key support (reinforced somewhat by the 100-Day Moving Average (DMA) at 1.2636). 

Sustained weakness below the 1.26 zone could shift Cable into a new, lower trading range between 1.23 and 1.25.