GBP/USD drops back towards 1.2260 ahead of UK PMI

The GBP/USD pair trims gains, although remains well bid in Europe, as the US dollar comes under fresh selling pressure in wake of uncertainty and anxiety ahead of the FOMC decision and US elections.

GBP/USD holds above 1.2200

The cable is seen reversing a spike to daily highs just an hour before the UK construction PMI release, as investors look to lock-in some gains.

Moreover, any recovery attempt remains capped on the back of persisting US election-related jitters, which weigh negatively on the demand for higher-yielding currencies such as GBP.

Following the release of UK construction PMI report, the US ADP jobs data and Fed verdict will take center-stage in the American session.

GBP/USD Levels to consider            

At 1.2180, the pair finds immediate resistances placed at 1.2283 (daily R1), 1.2300 (Oct 20 high) and 1.2327 (Oct 18 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).