GBP/USD holds marginally above 1.29 mark, FOMC minutes in focus

The GBP/USD pair reversed disappointing UK services PMI-led slide and is now holding in neutral territory around 1.2910-20 band as investors keenly await the release of FOMC meeting minutes. 

Having posted a session high near mid-1.2900s, the pair came under some renewed selling pressure and touched a one-week low level below the 1.2900 mark on disappointing UK services PMI, dropping more-than-expected to a four-month low level of 53.4 in June from 53.8 in May. 

   •  UK: Disappointing services PMI confirms weakness - BBH

Against the backdrop of this week's weaker manufacturing and construction PMI prints, today's weaker services sector growth data indicates that the UK economy could be headed for a slowdown in the coming months. With eyes on rising inflationary pressure, an economic slowdown would further add to the BoE's complications amid uncertainty surrounding the Brexit negotiations.

The pair, however, has managed to rebound from lower levels as traders seemed reluctant to initiate fresh positions heading into the big event risk - minutes of the latest FOMC June 13-14 meeting. This along with Friday's monthly jobs data would provide fresh clues on the likelihood of additional Fed rate hike action by the end of this year and drive the US Dollar, and the major in the near-term.

   •  FOMC minutes in the limelight – Nomura

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The technical picture for the pair is bearish short-term, as in the 4 hours chart, the 20 SMA keeps gaining downward strength above the current level, while technical indicators continue heading south within negative territory, with the RSI accelerating south around 42. Below the mentioned low, the pair has scope to extend its decline firstly towards 1.2860, the 38.2% retracement of its latest bullish run and June 27th high, while below this last, 1.2810 comes next."

"Above 1.2920, the bearish pressure will ease, but the pair needs to surpass the next intraday resistance at 1.2960, to turn positive, and attempt a rally towards 1.3000" she added further.