GBP/USD reverses UK PMI-led slide, back above mid-1.2900s

The GBP/USD pair reversed disappointing UK PMI-led slide and is currently placed closer to session tops, in the 1.2955-60 region.

The pair touched a session low level of 1.2929 after the latest UK construction PMI unexpectedly dropped to 51.1 in August, yearly lows, down from previous month's 51.9 and worse than 52.0 expected.

Further fall, however, remained limited amid persistent US Dollar selling pressure, led by Friday's  disappointing US monthly jobs report. 

Also cushioning the downside was a modest pull-back in the EUR/GBP cross, amid repositioning trade ahead of this week's very important ECB monetary policy decision. 

Moreover, traders seemed lacking conviction on a lackluster trading session on Monday in wake of a holiday in the US and Canadian markets, in observance of Labor Day holiday.

Technical levels to watch

Momentum beyond 1.2975 level now seems to lift the pair beyond the key 1.30 psychological mark towards testing its next hurdle near the 1.3030-35 region.

On the flip side, 1.2935-30 area remains immediate support to defend, which if broken could accelerate the fall back towards the 1.2900 handle before the pair eventually drops back to last week's swing lows support near mid-1.2800s.