GBP/USD: Bulls gathering pace for a test of 1.3100

The GBP/USD pair is seen extending its upside consolidative mode into Europe, with the bulls taking a breather before the next push higher.

GBP/USD extends the recent bullish move

The bulls try hard to take on the bids above 1.3050 levels, but in vain, as a pause in broad USD sell-off leaves the GBP/USD pair consolidating yesterday’s massive rally to 1.3045, monthly highs.

The latest upmove can be largely attributed to broad based USD selling, triggered by disappointing US factory data and dovish Fedspeaks, which squashed hopes of a Fed rate hike this year.

Meanwhile, Cable ignored weaker-than expected UK services and construction PMI reports, while Brexit divorce bill uncertainty as well as North Korea risks failed to cap the solid rally seen in the major a day before.

UK services PMI drops further in August

UK construction PMI surprises negatively in Aug, at yearly lows

In the day ahead, amid a lack of economic drivers from the UK docket, all eyes remain on the US ISM services PMI and Fed Beige Book for fresh incentives on the USD price-action.

GBP/USD levels to consider             

Haresh Menghani, Analyst at FXStreet, explains: “From a technical perspective, a strong follow through buying interest beyond mid-1.3000s would reinforce the bullish break and should assist the pair to aim towards reclaiming the 1.3100 handle. The momentum could further get extended towards 1.3125 horizontal resistance.  On the flip side, any pull-back below the 1.30 handle might now find some fresh buying interest near 50-day SMA support near the 1.2980 region, below which the pair could drift back towards the 1.2920-15 region.”