• UK services PMI comes in at 54.3 for August, betters expectations.
• Resurgent USD demand/Brexit concerns kept a lid on recovery attempt.
The GBP/USD pair held on to its weaker tone, albeit once again managed to find some support near the 1.2800 handle post-UK services PMI.
After an initial uptick to an intraday high level of 1.2870, the pair met with some fresh supply and was being weighed down by resurgent US Dollar demand. This against the backdrop of fresh Brexit jitters kept exerting downward pressure for the fifth consecutive session.
The selling pressure abated following the release of UK services PMI, which bettered expectations and helped snap a slew of disappointing UK macro data this week (manufacturing and construction PMIs). In fact, the final Markit UK services PMI rose more than expected to 54.3 in August and provided a minor lift of around 20-25 pips to the major.
However, the post-data minor bounce lacked bullish conviction/any strong follow-through and held the pair within striking distance of breaking below the 1.2800 round figure mark to confirm a fresh bearish breakdown.
Technical levels to watch
A convincing break below the mentioned handle is likely to accelerate the fall towards 1.2765 intermediate support before the pair eventually drops to challenge the 1.2700 mark. On the upside, any recovery attempts might now confront fresh supply near mid-1.2800s, above which the pair is likely to aim towards reclaiming the 1.2900 round figure mark.