GBP/USD: UK PMI-led rebound fizzles at 1.3240, ISM eyed

The GBP/USD pair is seen fading a renewed uptick to 1.3240 levels, as the USD bulls are seen regaining lost ground ahead of the US dataflow, including the key ISM manufacturing PMI release.

GBP/USD: Eyes on US ISM PMI

The GBP bulls received fresh boost from an unexpected turnaround witnessed in the UK’s manufacturing sector activity last month, which drove the GBP/USD pair to the highest levels since September 2016 at 1.3239 levels.

UK manufacturing PMI rebounds sharply to 55.1 in July

The spot, however, failed to sustain the renewed upside, as broad based US dollar recovery from fourteen-month lows gathered steam, now pushing the DXY back near daily tops of 92.83 levels.

Moreover, the retreat in oil prices from two-month tops also weighs down on the risk sentiment, which provides negative input to the risk currency GBP.

Also, investors remain wary ahead of the BOE policy decision and inflation report release due out this Thursday, hence, capping further gains in Cable.

With the UK PMI out of the way, markets eagerly await the US ISM manufacturing PMI report among other second-tier US releases for fresh USD moves. The US ISM PMI is expected to come in at 56.4 in July versus 57.8 booked previously.

GBP/USD levels to consider             

At 1.3225, the pair still eyes a test of 1.3250 (psychological levels/ Sep 16 high) and 1.3345 (Sep 12 high). On the downside, supports could be seen at 1.3100/1.3098 (psychological level/daily low), 1.3000 (Jul 26 low) and 1.2950 (Jul 21 low).