GBP/USD rejected near 1.2950, eyes 1.2900 ahead of UK PMI

The bid tone behind the US dollar is seen growing bigger as we head into early Europe, knocking-off the GBP/USD pair to refresh daily lows near 1.2915 levels.

GBP/USD: Focus on UK manufacturing PMI, US NFP

The spot came under fresh selling pressure during the mid-Asian session, having faced stiff resistances near the midpoint of 1.29 handle, as the US dollar stalled its latest down move and attempted a tepid-recovery against its main competitors.

The greenback is seen extending its recovery mode into Europe, as markets resort to unwinding their USD shorts ahead of the main risk event for today – the US non-farm payrolls data.

Moreover, the pound also turned into the red zone, as markets expect the UK manufacturing sector activity to slow its pace of expansion in August to 55.0 from 55.1 seen last.

Additionally, slow progress on the Brexit negotiations, with both the UK and EU having expressed frustration at the pace of Brexit talks amid disagreement over the size of the UK's "divorce bill", also keeps the sentiment around British currency undermined.

Looking ahead, it remains to be seen if the spot can sustain above 1.29 handle, as an upside surprise in the US jobs data could exacerbate the pain in Cable.

GBP/USD levels to consider             

Haresh Menghani, Analyst at FXStreet explains, “bulls would be eyeing for a sustained move beyond 50-day SMA hurdle near the 1.2965-70 region, above which the pair seems set to surpass the key 1.30 psychological mark and head towards testing its next horizontal resistance near 1.3030-35 area.” 

On the flip side, weakness back below the 1.2900 handle, leading to a subsequent drop below mid-1.2800s, now seems limited and is more likely to find some strong buying interest near a short-term ascending trend-line support near the 1.2810-1.2800s region,” Haresh adds.