GBP/USD bounces off lows, around 1.2260 ahead of PMI

Another day, another pullback in the Sterling. GBP/USD is navigating the lower bound of the range in the 1.2250/60 band ahead of the opening bell in Europe.

GBP/USD attention to PMI

The pair is losing ground for the sixth session in a row so far today, trading in fresh 6-week lows albeit retaking some pips after bottoming out in the 1.2240 area on Thursday.

Renewed jitters on Brexit plus the continuation of the rally in the greenback have been the exclusive drivers behind the recent drop in spot, which already shed more than 3 cents since Friday’s tops in the 1.2580 region.

It is worth mentioning that the House of Lords has voted earlier this week to amend the Brexit bill demanding guarantees for EU nationals in the UK once the country leaves the European Union. The amendments should now be discussed in the House of Commons, although PM Theresa May has already said she plans to trigger Article 50 by the end of March.

Adding to the pair’s downside, rising expectations of a Fed’s 25 bp rate hike at the March meeting have lifted US yields and gave fresh legs to the buck, taking the US Dollar Index (DXY) to 2-month highs above the critical 102.00 handle.

Later in the session, UK’s always-relevant Services PMI is expected to have eased a tad to 54.1 for the month of February from January’s 54.5. Across the pond, the speech by Chief J.Yellen on ‘Economic Outlook’ should grab all the attention.

GBP/USD levels to consider

As of writing the pair is losing 0.02% at 1.2264 and a break below 1.2240 (low Mar.2) would aim for 1.2197 (low Dec.28 2016) and finally 1.2036 (low Jan.11). On the flip side, the initial up barrier aligns at 1.2308 (high Mar.2) followed by 1.2390 (55-day sma) and then 1.2410 (100-day sma).