GBP/USD breaks lower to test 1.2930 on poor UK PMI

The GBP/USD pair finally broke consolidative mode around mid-1.29s to the downside, following the release of the UK construction sector activity report, which showed the weakest reading since August 2016.

GBP/USD headed to 1.2900?

The bears fought back control, now pushing the major away from 1.2950 levels, in an extension of the retreat from two-week tops reached just shy of 1.30 handle last Friday.

The break lower seen in GBP/USD can be mainly attributed to renewed GBP selling seen across the board, after the markets were highly disappointed by the UK construction PMI data, which dropped unexpectedly last month. UK construction PMI surprises negatively in Aug, at yearly lows

Moreover, the latest North Korea headlines further intensified risk-aversion across the European markets, keeping a check on any upside attempts in Cable. More so, a lack of progress on the Brexit negotiations between the UK and EU also continues to weigh on the sentiment around the British currency.

However, the spot could find support at lower levels, as buyers continue to lurk amid broad based US dollar weakness, in the wake of worse-than expected US payrolls data. Looking ahead, amid holiday-thinned trading, the GBP/USD price-action will get affected by cross-driven moves and risk trends.

GBP/USD levels to consider             

Haresh Menghani, Analyst at FXStreet, explains, “On the upside, sustained momentum above the 1.30 handle, leading to a subsequent break through 1.3030-35 resistance area, is likely boost the pair towards the 1.3100 round figure mark en-route 1.3150-55 horizontal resistance. Alternatively, weakness back below the 1.2900 handle might continue to find some support near mid-1.2800s.”