GBP/USD reverses a spike to 1.2280, UK PMI eyed

A renewed rally in the GBP/USD pair lost steam near daily R1, sending the rate back towards the mid-point of 1.22 handle, as markets eagerly await the UK manufacturing PMI report for further impetus.

GBP/USD remains capped below 1.2300

A renewed bout of risk-on wave gripped Europe after the European traders hit their desks and reacted positively to the auspicious Chinese PMI data, which sent higher-yielding/risk assets such as equities, GBP, oil etc. higher.

Moreover, aggressive selling seen behind the US dollar across the board, also attributed to the spike seen in the GBP/USD pair last hour. However, the major is seen retracing the renewed uptick as markets seek to book profits ahead of the UK manufacturing PMI report due out shortly.

Analysts at TDS noted, “We look for the manufacturing PMI to gain further ground in October to 56.1 (mkt 54.4).”

GBP/USD Levels to consider            

At 1.2256, the pair finds immediate resistances placed at 1.2283 (daily R1), 1.2300 (Oct 20 high) and 1.2327 (Oct 18 high). While supports are lined up at 1.2211 (5-DMA) and 1.2173 (daily S1) and below that at 1.2134 (Oct 17 low).