“¢ Returning trade tensions keeps the USD bulls on the defensive.
“¢ British Pound gets an additional boost from stronger UK PMI print.
“¢ Technical buying to emerge on a sustained move above 1.34 handle.
The GBP/USD pair maintained its strong bid tone through the mid-European session, with bulls now eyeing a decisive move beyond the 1.3400 handle.
With investors looking past Friday’s upbeat US monthly jobs report, returning global trade war fears kept the US Dollar bulls on the back-foot and assisted the pair to build on last week’s goodish rebound from the 1.3200 neighborhood, or 6-month lows.
Meanwhile, today’s better-than-expected UK construction PMI, which came at 52.5 for May, added to Friday’s stronger UK manufacturing PMI print and further collaborated to the pair’s ongoing recovery move for the fourth consecutive session.
The British Pound was further supported by news of a possible solution over the Northern Ireland border issue, with a follow-through up-move, led by some fresh technical buying above the 1.3400 round figure mark, now looking a distinct possibility amid empty US economic docket.
Later during the New-York trading session, a scheduled speech by BOE’s external MPC member Silvana Tenreyro might influence the GBP price dynamics and eventually provide some short-term trading opportunities.
Technical levels to watch
On a sustained move beyond the 1.3400 handle, the pair is likely to head towards testing its next hurdle near the 1.3465-70 region before aiming to reclaim the key 1.35 psychological mark. On the flip side, any retracement slide now seems to find immediate support near the 1.3345 area, below which the pair could drop back below the 1.3300 handle and head towards retesting its next support near mid-1.3200s.
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