GBP/USD holds above 1.25 mark after US ISM PMI

The GBP/USD pair had a muted reaction and held on to its recovery back above the key 1.25 psychological mark following the release of US ISM manufacturing PMI.

According to the data released from the US, the ISM manufacturing PMI for March came-in at 57.2, down from previous month’s 57.7 but was slightly above consensus estimates pointing to a reading of 57.0. 

The data did little to provide any fresh impetus for the major, albeit helped the pair to trim some of its bearish slide led by disappointing UK manufacturing PMI that showed manufacturing growth slowed for the third consecutive month in March. 

   •  GBP/USD short-term outlook remains negative – Commerzbank

With economic data out of the way, focus now shifts to speeches by various FOMC members - New York Fed President William Dudley, Philadelphia Fed President Patrick Harker and Richmond Fed President Jeffrey Lacker.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "the downward potential is still limited, given that in the 4 hours chart, the pair is developing above a bullish 20 SMA, whilst technical indicators have pulled back, but are still holding above their mid-lines. The mentioned moving average is the immediate support at 1.2480, with a break below it probably resulting in a downward move towards 1.2430 a Fibonacci support. Further declines can see the pair extending towards 1.2370/90, probable bottom for today."

"The immediate short term resistance stands at 1.2540, with an upward acceleration above it favoring an extension towards 1.2590/1.2600" she added.