“¢ Investors looked past today’s upbeat UK services PMI print for June.
“¢ Modest USD uptick/Brexit uncertainties keep a lid on any further up-move.
The GBP/USD pair struggled to build on the UK data-led positive momentum and quickly retreated around 20-25 pips from fresh one-week tops touched in the last hour.
Today’s upbeat UK services PMI, which added to the recent slew of positive UK economic data, further increased prospects for a BoE rate hike move in August and provided a minor boost to the British Pound, lifting the pair to an intraday high level of 1.3228.
The up-move, however, lacked any strong follow-through and was being capped by a goodish pickup in the USD demand. In fact, the key US Dollar Index reversed early dip to over one-week lows, which coupled with the unfavourable situation surrounding Brexit talks kept a lid on any meaningful up-move for the major.
It would now be interesting to see if the pair is able to stick to the positive bias or once again fails to sustain above the 1.3200 handle as market focus now shifts to this week’s key event risks – the latest FOMC meeting minutes and the keenly watched non-farm payrolls, which might help determine the pair’s next leg of directional move.
Technical levels to watch
The 1.3170 area (session low) might continue to protect the immediate downside, which if broken is likely to accelerate the fall back toward the 1.3110-1.3100 important support. Alternatively, a fresh wave of buying interest has the potential to continue lifting the pair towards 1.3275-80 intermediate hurdle en-route the 1.3300 handle.
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