GBP/USD holding above 1.32 handle ahead of ADP report

Having retested multi-month tops near the 1.3245 region, the GBP/USD pair retreated few pips and is currently trading around 1.3220-25 region ahead of the US ADP report.

The pair shrugged off today's disappointing release of UK construction PMI, which dropped to its lowest level since August 2016 and jumped back to 10-month highs touched in the previous session. 

Persistent greenback selling bias, with the key US Dollar Index failing to build on overnight recovery move from 15-month lows, supported the pair's up-move to the highest level since mid-September 2016. Continued US political uncertainty and growing concerns over softening US inflation, which is now perceived to hinder the Fed's monetary policy normalization path, continued weighing on the greenback through the mid-European session on Wednesday.

Traders, however, seemed to refrain from placing aggressive bets ahead of the release of ADP report on the US private sector employment, which is looked upon as a precursor to Friday's official NFP print.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The pair needs now to accelerate through 1.3260 to extend its advance towards the 1.3300/20 region, with further gains unlikely for today. Below 1.3190, on the other hand, the pair can correct lower, with the next intraday supports at 1.3150 and 1.3110."