GBP/USD looks heavy, but range trade intact

GBP/USD has dropped 30 pips from the session high of 1.3402, but still remains stuck in the three-day trading range of 1.3450-1.3350.

Pound appears to have been dragged lower from the common currency, which is feeling the heat of following the surprise independence vote in Catalonia. The latest report says 90% voted for independence in Catalonia referendum. However, Reuters report says, " dealers have seen no real selling of euros as yet and neither was there any flow to safe havens, with investors reserving judgement."

Thus, the minor blip in Euro and especially in Pound could be short lived if the risk assets perform well during the day ahead.

Focus on UK PMI

UK PMI manufacturing, due at 08:30 GMT is expected to show the pace of expansion in the activity remained largely unchanged at 56.4.

GBP/USD Technical Levels

At press time, the spot is trading at 1.3368. A break below 1.3343 [Sep 28 low] would open doors for 1.3320 [38.2% Fib R of Aug 24 low - Sep 20 high] and 1.33 [zero levels]. On the higher side, breach of hurdle at 1.3409 [5-DMA] would expose 1.3458 [10-DMA] and 1.3472 [1-hour 200-MA].