“¢ Brexit uncertainties/resurgent USD demand prompts some fresh selling on Monday.
“¢ Better than expected UK manufacturing PMI print helps ease the downward pressure.
“¢ Traders now look forward to the US ISM manufacturing PMI for some fresh impetus.
The GBP/USD pair held on to its weaker tone through the early European session, albeit has managed to bounce off few pips from lows on upbeat UK PMI print.
With investors looking past Friday’s upward revision of the UK GDP growth figures, the British Pound opened on a defensive note and was weighed down by an unfavourable situation surrounding Brexit talks.
This coupled with resurgent US Dollar demand, despite a weaker tone surrounding the US Treasury bond yields, exerted some additional downward pressure and further collaborated to the pair’s downfall at the start of a new trading week.
The selling pressure seemed to have abated a bit following the release of better than expected UK manufacturing PMI, coming in at 54.4 in June for June as compared to 54.0 anticipated.
It would now be interesting to see if the pair is able to regain any positive traction or the current pull-back marks the end of a modest recovery attempt from YTD lows, witnessed on Friday.
Later during the early North-American session, the release of US ISM manufacturing PMI will kick off this week’s busy US economic docket, which also features the release of keenly watched non-farm payrolls data.
Technical levels to watch
Immediate support is pegged near the 1.3110-1.3100 region, below which the pair is likely to accelerate the slide towards the 1.3050-40 area (multi-month lows) before eventually dropping to the key 1.30 psychological mark.
On the upside, the 1.3210 level now seems to have emerged as an immediate resistance, which if cleared might provide an additional boost and lift the pair towards 1.3275-80 supply zone en-route the 1.3300 handle.
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