GBP/USD off UK PMI-led swing lows to 1.2915 level

The GBP/USD pair managed to rebound from session low near 1.2915 level touched in the last hour but lacked any follow through momentum and remained capped below mid-1.2900s.

The extended previous session's slide and dropped to the 1.2900 neighborhood in response to the UK construction PMI, dropping to 54.8 in June as compared to previous month's 56.0 and worse than 55.0 expected. 

Against the backdrop of Monday's dismal UK manufacturing PMI, today's weaker construction figures suggested that the UK economy was still not strong enough and toned down the recent hawkish rhetoric from the Bank of England. 

The pair, however, quickly recovered from lows and turned neutral as traders refrained from initiating fresh short positions amid thin liquidity conditions in wake of the Independence Day holiday in the US. 

Meanwhile, the prevalent positive tone around the US Treasury bond yields, which underpinned the US Dollar demand, also seems to have kept a lid on the recovery move from 4-day lows.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, “the short intraday outlook is bearish, with the price below its 20 SMA, and technical indicators heading south within bearish territory, at fresh weekly lows. The pair has now an immediate support at 1.2910, with a break below it probably resulting in additional declines towards 1.2870. The upside seems well limited by 1.2960, where selling interest contained advances since mid Monday.”