GBP/USD struggling to extend recovery move after UK services PMI

The GBP/USD pair failed to build on to its recovery gains but has managed to hold its neck above 1.2700 handle following the release of UK services PMI.

Currently trading around 1.2725 region, the pair managed to rebound from sub-1.2700 level, fresh 31-year low touched during early European session. The recovery, however, lacked momentum and the pair failed to benefit from slightly better-than-expected release of UK services PMI.

The final UK Markit/CIPS services PMI print for the month of September came-in at 52.6, better-than 52.0 expected but was below 52.9 recorded in August.

With near-term oversold conditions, the pair’s rebound from a short-term descending trend-channel support suggests that the pair might extend the recovery from current levels.

Next in focus would be US economic releases, which include – ADP report, ISM non-manufacturing PMI, trade balance and factory orders, later during NY trading session. Today’s release of ADP report would act as a precursor to Friday’s official jobs report (NFP) and hence, is likely to trigger a fresh bout of volatility in the FX market.

Technical levels to watch

Immediate upside resistance is pegged near 1.2760-70 region above which the pair is likely to get an additional boost beyond 1.2800 handle towards its next major resistance near 1.2840 region.

On the downside, weakness back below 1.2700 handle might now force the pair to break through session low support near 1.2685 and continue with its sharp slide further towards testing 1.2600 round figure mark.

Avg Forecast1.2933
  • 22% Bullish
  • 67% Bearish
  • 11% Sideways
Bias Bearish
Avg Forecast1.2812
  • 8% Bullish
  • 54% Bearish
  • 38% Sideways
Bias Bearish
Avg Forecast1.2689
  • 0% Bullish
  • 56% Bearish
  • 44% Sideways
Bias Bearish

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