GBP/USD: Bulls rescued by risk reset, back above 1.2900

Despite worse-than expected UK services PMI report, the GBP/USD pair managed to find buyer just below 1.29 handle, with the pair now extending the tepid recovery towards 1.2920 levels.

GBP/USD: Poor UK services PMI still weighs

The GBP/USD pair erased most gains and trades modestly flat, having derived support from a turnaround in risk conditions, as markets looked past the North Korean tensions.

However, the recovery appears to lack momentum, as recent series of downbeat UK PMI surveys combined resurgent USD demand across the board continue to keep the upside in check. UK services PMI: ‘A slowing in services sector growth completes a triple-whammy of disappointing PMIs’

 Focus now shifts towards the US docket, with the factory orders and economic optimism data on the cards, ahead of the eagerly awaited FOMC minutes, which could provide details on the size and the timing of the Fed’s balance sheet normalization plans.

GBP/USD levels to consider             

To the upside, the immediate resistance is the 1.2948 (daily tops) followed 1.2968 (5-DMA) and then 1.3030 (5-week tops). On the downside, support could be located at 1.2864 (50-DMA), 1.2815 (20-DMA) and 1.2800 (round number).