GBP/USD: Upside capped below 1.2900 ahead of UK PMI

The GBP/USD pair stalled its overnight retreat and remained subdued below 1.29 handle throughout the Asian trades, as markets look forward to fresh impetus from the upcoming UK manufacturing PMI release.

GBP/USD stuck below 10-DMA at 1.2894

The major is seen consolidating the overnight retreat around 1.2875 levels amid a pullback seen in the US dollar across the board, as treasury yields edge higher on risk-on market profile, fuelled by higher oil and Asian indices.

Markets appear to have shrugged-off dismal Chinese manufacturing PMI data, with risk-on sentiment driving Asia. However, the risk currency GBP fails to benefit from a better risk-environment, in the wake of a profit-taking slide after yesterday’s bounce, and ahead of the first key macro release of the week from the UK docket – manufacturing PMI report.

Cable staged a solid comeback a day before, mainly on the back of a Kantar opinion poll showing that Conservatives' lead increased from 8, to 10 points. Moreover, mixed US economic data knocked-off the greenback sharply lower against most of its major peers, thereby helping the reversal in GBP/USD from multi-week lows of 1.2770.

All eyes now remain on the UK manufacturing PMI data, US ADP jobs and ISM manufacturing PMI releases for fresh momentum on the pair.

GBP/USD Levels to consider            

Valeria Bednarik, Chief Analyst at FXStreet noted: “With the 4 hours chart showing that the price extended well above its moving averages that anyway lack directional strength, whilst technical indicators are retreating within positive territory, reflecting decreasing buying interest around the mentioned level. Support levels: 1.2830 1.2790 1.2765 Resistance levels: 1.2920 1.2960 1.3000.”