GBP/USD extends gains above 1.3050, hits fresh 1-month highs

The pound continued to rise against the US dollar. During the last 24 hours gained 150 pips. GBP/USD reached 1.3080, the strongest level August 4. 

At the moment it trades at 1.3060, up around 40 pips for the day supported by a weak US dollar across the board. The US Dollar Index dropped to 91.92, the lowest in a week and it could post the lowest close since January 2015. 

Data released today from the US, showed lower-than-expected numbers from the Service sector. The Markit PMI stood at 56.0 in August (below 56.9 of the flash estimate) while the ISM Non-manufacturing rose from 53.9 to 55.3, below the 55.8 expected. The data contributed to the slide of the greenback. 

Technical levels

The upside bias of GBP/USD appears to have lost momentum with the recent retreat from the highs but so far, technical signals do not point toward a more significant slide. Price remains well above the 20-day moving average (1.2935), a daily close below would expose 1.2900 and below 1.2845/50. 

In the short-term, immediate resistance might be seen at 1.3080/85 (daily high), followed by 1.3110 (Jul 14 high) and 1.3160/65 (Aug 4 high).