GBP/USD: Key support at 1.2220 tested, UK PMI eyed

The GBP/USD pair keeps losses and hovers near the lower bound of today’s trading range so far this session, having run into offers at the mid-point of 1.22 handle, as risk-off persists across the financial markets.

GBP/USD holds above 1.2200

The cable remains under mild pressure, bearing the brunt of lack of risk appetite, as markets prefer to park their funds into safe-havens amid uncertainty seen around the US elections and also ahead of the Fed’s interest rates decision due later on Wednesday.    

Moreover, weaker commodities’ prices, particularly oil, combined with heavy selling in the Asian equities further fuelled the wide-spread risk-aversion and weighed down on the higher-yielding currency GBP.

Later in the day, markets look forward to the UK construction PMI, which is also expected to deteriorate in Oct, much like yesterday’s manufacturing PMI data. While the main risk event for today remains the Fed decision, which will be announced after the ADP jobs data release.

GBP/USD Levels to consider            

At 1.2180, the pair finds immediate resistances placed at 1.2250 (key resistance), 1.2283 (daily R1) and 1.2300 (Oct 20 high). While supports are lined up at 1.2204 (daily S1) and 1.2173 (Oct 18 low) and below that at 1.2134 (Oct 17 low).