- GBP/USD started retreating from daily tops on weaker UK PMI prints.
- Diminishing odds of a no-deal Brexit continued lending some support.
- The prevalent USD selling bias further helped limit any deeper losses.
The GBP/USD pair extended its sideways consolidative price action and held near the lower end of its daily trading range through the early North-American session.
The pair failed to capitalize on its intraday uptick, rather met with some fresh supply near the 1.3420-25 region and was further weighed down by the disappointing releases of the flash version of the UK PMI prints for December.
According to a survey published this Monday, both the services and manufacturing sectors suffered their worst downturn since mid-2016 and suggested that the economy is on course to contract in the fourth quarter of 2019.
The pullback, however, remained cushioned on the back of diminishing odds of a no-deal Brexit, fueled by a landslide victory for the incumbent Conservative Party at the most important UK Parliamentary elections on December 12.
This coupled with the prevalent US dollar selling bias, despite a goodish intraday pickup in the US Treasury bond yields, extended some additional support and further collaborated towards limiting any deeper losses, at least for now.
The USD bulls remained on the defensive and failed to gain any respite from slightly weaker-than-expected Empire State Manufacturing Index, which edged higher to 3.9 for December from 2.9 previous and 4.0 anticipated.
Hence, it will be prudent to wait for some strong follow-through selling before confirming that the pair might have already topped out in the near-term and positioning for any meaningful corrective slide in the near-term.
Technical levels to watch
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