“¢ UK construction PMI betters expectations and prints 53.1 for June.
“¢ A modest USD retracement remains supportive of the positive move.
The GBP/USD pair built on its steady climb from an intraday low level of 1.3115 and refreshed session tops post-UK construction PMI.
After yesterday’s downside, the pair regained positive traction on Tuesday and was being supported by a modest US Dollar retracement. The up-move got an additional boost following the release of UK construction PMI, which bettered expectations and added to yesterday’s upbeat UK manufacturing PMI.
The Markit final UK construction PMI rose to 53.1 in June as compared to previous month’s reading of 52.5 and anticipated. This coupled with some hawkish comments by the BoE MPC member Michael Saunders, saying that wage growth is gradually picking up and rates may need to rise faster than the market expects, remained supportive of the bid tone surrounding the British Pound.
It, however, remains to be seen if the pair is able to build on the momentum or once again meets with some fresh supply at higher levels amid uncertainties surrounding Brexit talks. Hence, it would be prudent to wait for a strong follow-through buying before positioning for any further near-term appreciating move.
Technical levels to watch
On a sustained move beyond the 1.3200-1.3210 immediate hurdle, the pair is likely to accelerate the up-move towards 1.3275-80 supply zone en-route the 1.3300 handle. On the flip side, the 1.3135 horizontal zone now seems to protect the immediate downside, which if broken might expose the 1.3100 handle before the pair eventually drops back to YTD lows support near mid-1.3000s.
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