- Bulls extend control, as UK manufacturing PMI surprises to the upside.
- Stalled U dollar buying, risk-on sentiment boosts the Cable.
- Focus on UK Raab’s speech and US ISM manufacturing PMI.
The GBP/USD pair is seen flirting with the session highs reached near the 1.3060 region, as the bulls cheer the positive surprise delivered by the UK manufacturing PMI report.
The UK manufacturing sector activity unexpectedly rebounded to 53.8 in September from 25-month lows of 52.8 seen in August, ending the second quarter on a solid footing.
The Cable also derives support from the return of risk appetite in Europe, as the European equities head higher alongside the Treasury yields while the US dollar edged lower across the board, awaiting fresh trading impetus from the US ISM manufacturing PMI release due at 1400 GMT.
Meanwhile, the sentiment around the pound also remains lifted in anticipation of a major speech due from the UK Brexit Secretary Raab, as the Conservative party conference enters into the second day.
GBP/USD Technical Levels
FXStreet’s Analyst Haresh Menghani, noted: “A convincing break below the 1.30 handle, leading to a subsequent weakness below 50% Fibonacci retracement level support near the 1.2980 area, will reinforce the negative outlook and turn the pair vulnerable to accelerate the slide further towards 61.8% Fibonacci retracement level support near the 1.2900 handle. On the flip side, the 1.3055 area (38.2% Fibonacci retracement level) now seems to act as an immediate resistance, above which the pair is likely to aim towards reclaiming the 1.3100 handle before eventually testing 100-day SMA hurdle near the 1.3130 region.”
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