GBP/USD bounces off 3-week lows, turns neutral ahead of UK PMI

Having posted a session low level of 1.3230, the GBP/USD pair caught some fresh bids and is now eyeing a move towards the 1.3300 handle ahead of UK construction PMI.

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The pair's rebound from near three-week lows has been primarily led by a modest US Dollar pull-back. Ahead of today's UK macro data, retracing US Treasury bond yields seems to be the only factor prompted traders to cover some of their short positions. 

However, lack of progress in the ongoing Brexit talks, coupled with renewed optimism over the US President Donald Trump's tax reform plans and Fed rate hike expectations kept a lid on any further up-move, at least for the time being. 

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Traders would now take cues from the UK construction PMI print, due for release in a short while from now. There aren’t' any major market moving economic releases from the US and hence, speech by the Fed Governor Jerome Powell would influence the USD price dynamics and eventually provide some impetus later during the NA session.

Technical levels to watch

On a sustained move beyond the 1.3300 handle, a bout of short-covering could lift the pair towards 1.3340 intermediate resistance en-route 1.3380-85 strong horizontal barrier. 

Meanwhile, on the downside, weakness below 1.3230-25 area could get extended towards the 1.3200 handle, which if broken has the potential to continue dragging the pair further towards its next support near the 1.3160-55 region.