GBP/USD rises toward daily highs as USD losses strength

GBP/USD is moving toward daily highs and also closer to the 1.3000 handle. The pair gained momentum on the back of a decline of the US dollar across the board during the American session. 

The pair found support at 1.2920 and bounces to the upside. Currently, it trades at 1.2965, still below European session highs at 1.2982. Short-term momentum favors the upside with limited moves as it has been the case of the last three days. The daily price range since Tuesday is around 50 pips, significantly lower than what happened last week. 

US dollar correction lost strength yesterday around 1.2890. The FOMC minutes failed to boost the greenback in the market. Today’s ADP employment report, showed that the private sector added 158K jobs, below the 185K expected. Later, service sector data from ISM and Markit surpassed expectations but the US dollar was not significantly affected. Tomorrow the NFP is due. 

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Still near 1.3030/50

The downside correction, after last week rally of more than 250 pips, so far has been limited. Price is gaining upside momentum but not enough to break the key technical resistance around the 1.3030/50 zone. That area limited the upside in May, June and July. A consolidation on top would clear the way to more gains. While below, any rally would be seen as limited. 

For the coming hours the bias point to the upside. That could change with a decline below 1.2925/30 (55-hour SMA / American session low / intraday trendline), that could weaken the pound and clear the way for a slide to 1.2910. To gain more traction, the US dollar needs a consolidation under 1.2900, not likely at the moment.