GBP/USD consolidates just below 2-month tops, UK PMI awaited
• Now seems facing resistance near mid-1.3500s.
• Brexit optimism could limit any meaningful downslide.
• Manufacturing PMIs eyed for fresh trading impetus.
The GBP/USD pair surrendered majority of its early modest gains to fresh 2-month highs and retreated around 25-30 pips from session tops.
The latest leg of strong upsurge of around 330-pips since Tuesday, led by Brexit optimism, now seems to be facing strong resistance near mid-1.3500s and in absence of any fresh positive news, traders resort to profit taking ahead of the key UK manufacturing PMI.
The downside, however, remained cushioned by some renewed US Dollar weakness, which was being weighed down by concerns over the fate of US tax overhaul bill. The Senate on Thursday delayed a vote on the highly-anticipated US tax cut legislation and ruled that a fiscal trigger will not work under Senate rules.
Currently consolidating around the 1.3525 region, traders now look forward to the UK manufacturing PMI and US ISM manufacturing PMI, along with speeches by influential FOMC speakers for some fresh impetus.
Technical levels to watch
The key 1.35 psychological mark now seems to protect the immediate downside, which if broken could prompt additional profit-taking slide towards 1.3460-55 horizontal support.
On the upside, a clear breakthrough mid-1.3500s now seems to pave the way for an extension of the pair’s near-term upward trajectory towards 1.3580 intermediate resistance en-route the 1.3600 handle.