GBP/USD probing highs around 1.2550 ahead of PMI

The Sterling has started the weak on a dubitative fashion, prompting GBP/USD to gravitate around the mid-1.2500s ahead of the opening bell in Euroland.

GBP/USD attention to PMI

It’s PMI-day in pretty much the whole FX universe. Market participants are currently expecting UK’s Manufacturing PMI to have reverted the downtrend seen in past months during February (55.1 exp. vs. 54.6 prev.) lending at the same time some extra support to GBP.

Spot is so far struggling to extend its positive streak for the third day, coming up from last week’s troughs in the 1.2370 region, while Monday’s top near 1.2620 appears as the next interim target.

The now softer tone around the greenback is helping Cable to get some traction, as traders continue to cash up part of the strong gains recorded last week. Anyway, USD-dynamics stay poised as the main driver behind the pair’s price action in the very near term, with Fedspeak, the FOMC minutes (Wednesday) and Non-farm Payrolls (Friday) as the salient points this week.

On the positioning front, the speculative community gave some respite to GBP during the week ended on March 28, as net shorts retreated to 3-week lows according to the latest CFTC report.

GBP/USD levels to consider

As of writing the pair is up 0.01% at 1.2551 and a breakout of 1.2598 (high Mar.28) would aim for 1.2618 (high Mar.27) and finally 1.2661 (200-day sma). On the other hand, the next support aligns at 1.2497 (23.6% Fibo of the March up move) followed by 1.2429 (55-day sma) and then 1.2375 (low Mar.29).