GBP/USD bounces off lows, retakes 1.3400 mark and beyond
• Brexit concerns continue to weigh on the British Pound.
• Softer UK services PMI fails to provide any respite.
• US data eyed for short-term trading opportunities.
The selling pressure around the British Pound seems to have abated for the time being, with the GBP/USD pair recovering over 40-50 pips from session lows.
The dramatic unraveling of a potential Brexit deal on Monday continued exerting some downward pressure on the British Pound through the early European session.
In the run-up to the UK services PMI, the pair touched an intraday low level of 1.3370 before quickly rebounding back above the 1.3400 handle. The recovery move, however, lacked any follow through momentum and stalled near the 1.3430 region, despite subdued US Dollar price action.
Meanwhile, the market seems to have largely ignored today's weaker-than-expected UK services PMI, with Brexit headlines continuing to act as an exclusive driver of the pair's movement on Tuesday.
Traders now look forward to the US economic docket, featuring the release of trade balance data and ISM non-manufacturing PMI, in order to grab some short-term trading opportunities.
Technical levels to watch
The 1.3425-30 region now seems to have emerged as immediate resistance, above which the pair is likely to head back towards 1.3475-80 supply zone ahead of the key 1.35 psychological mark.
On the flip side, renewed weakness below the 1.3400-1.3390 zone could accelerate the slide towards mid-1.3300s en-route the 1.3310-1.3300 strong horizontal support.