GBP/USD keeps the red near session lows, around 1.2780 post-UK PMI

• GBP/USD once again meets with some fresh supply near the 1.2845-50 region.
• Bulls seemed unimpressed by a subdued USD price action, UK Services PMI.
• Investors now look forward to important US macro data for a fresh impetus.

The GBP/USD pair edged lower through the early European session and held near session lows, around the 1.2785-80 region post-UK macro data.

The pair failed to capitalize on the previous day’s late positive move and once again met with some fresh supply near the 1.2845-50 region. The downtick was sponsored by growing market concerns about the future UK-EU trade relationship and seemed rather unaffected by a subdued US dollar price action.

Bulls remain on the sidelines

The recent slump in the US Treasury bond yields accelerated further following the Fed’s surprise move on Tuesday to cut interest rates by 50 bps. In fact, the yield on the benchmark 10-year US government bond dropped below the 1% and kept a lid on the early attempted USD recovery move.

The GBP bulls, however, seemed rather unimpressed from the lack of any sustained USD buying, rather took cues from a slight disappointment from the final UK Services PMI, which was revised lower 53.2 for February from the initial estimate of 53.3 and anticipated.

It will now be interesting to see if the pair continues with its intraday downslide or continues to attract some dip-buying below mid-1.2700s. Market participants now look forward to the US economic data – the ADP report and ISM Non-Manufacturing PMI – for some meaningful trading impetus.

Technical levels to watch