The gains after PMI are quickly reversed with buyers stalling the fall near the 100 hour MA
The GBPUSD moved higher after the Markit PMI manufacturing index (P) for January rose to 49.8 from 47.5 last month. That was also better than the 48.8 in December. However, the run higher ran into eager sellers at 1.3168. The swing high from January 8 was at 1.31694. Admittedly, it was a minor hurdle to the upside, but it was still hurdle.
Perhaps traders felt that even at 49.8, the survey comes after the election and Brexit gains and manufacturers are still at contraction levels. The Bank of England odds are 50-50 for cut next week.
The run to the downside picked up steam after running back below the 50% retracement of the price action since December 31. That level comes in at 1.31185 as well as a upward sloping trendline just below that level.
The fall has seen to find some dip buyers leaning against the broken 38.2% retracement at 1.30796, and the rising 100 hour moving average at 1.3076. The low price for the day has so far reached 1.30789. Buyers were leaning and hoping for a rebound back to the upside. I would expect that on a break, those buyers may look to cover with support at the lower 200 hour moving average currently at 1.30528.
On a bounce from here, traders want to see the price extend back above the 1.3100 level to give them some additional confidence (stay above).