GBP/USD climbs to fresh session tops ahead of NFP

   “¢   Stronger UK manufacturing PMI helps regain traction on Friday.
   “¢   Surging US bond yields fail to assist the USD to preserve early gains.
   “¢   Traders likely to wait for NFP release before positioning for further up-move.

After an initial dip closer to mid-1.3200s, the GBP/USD pair reversed course and was now seen building on its momentum back above the 1.3300 handle.

The pair’s intraday day rebound got an additional boost during the early European session following a positive surprise from the latest UK manufacturing PMI, coming in at 54.4 for May vs. 53.5 anticipated and April’s reading of 53.9.

Also collaborating to the strong bid tone was a modest US Dollar retracement, which failed to preserve early gains and has now retreated back below the 94.00 handle, despite the ongoing upsurge in the US Treasury bond yields.  

Currently placed at fresh session tops, around the 1.3330 region, possibilities of some repositioning trade, ahead of today’s important data risk – the keenly watched NFP report, could also be one of the factors driving the pair higher.

It, however, remains to be seen if the pair is able to build on the momentum or the uptick is once again seen as an opportunity to initiate some fresh short positions amid uncertainty surrounding Brexit negotiations and the recent dovish tilt from the BoE.

Technical levels to watch

Any further up-move is likely to confront immediate resistance near mid-1.3300s, above which the pair is likely to head towards 1.3375-80 intermediate hurdle en-route the 1.3400 round figure mark.

On the flip side, the 1.3300 handle now seems to protect the immediate downside, which if broken might turn the pair vulnerable to head back towards testing the 1.3250-40 strong support.