“¢ UK construction PMI betters expectations and provides a minor boost on Tuesday.
“¢ A weaker tone around the USD provides an additional boost but fails to lift it further.
“¢ Brexit uncertainties seemed to be the only factor keeping a lid on any further up-move.
The GBP/USD pair struggled to build on the UK data-led bullish momentum and has now retreated around 40- pips from an intraday day high level of 1.3207.
Today’s better than expected UK construction PMI, coming in at 53.1 for June, added to yesterday’s upbeat UK manufacturing PMI and provided a minor boost to the British Pound.
This coupled with a modest US Dollar retracement provided an additional boost and assisted the pair to reverse all of its losses recorded on the first trading day of the week.
Weaker tone surrounding the USD remained unabated through the early North-American session, albeit the pair struggled to gain any follow-through traction beyond the 1.3200 handle.
Uncertainties surrounding Brexit talks was seen as one of the key factors keeping the GBP bulls on the back-foot and collaborating towards keeping a lid on any meaningful up-move for the major.
The latest leg of slide over the past couple of hours lacked any obvious catalyst and seemed more of a technical selling, especially after the pair’s repeated failure to build on its momentum beyond the 1.3200 handle. Hence, a follow-through downfall, back below 1.3150-45 immediate support, now seems a distinct possibility.
Technical levels to watch
Weakness below the mentioned support is likely to accelerate the slide toward the 1.3110-1.3100 support, which if broken might turn the pair vulnerable to head back towards retesting YTD lows support near mid-1.3000s.
On the upside, the 1.3200-1.3210 remains might continue to act as a key barrier, above which a bout of short-covering could lift the pair towards 1.3275-80 supply zone en-route the 1.3300 handle.
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