GBP/USD: Bulls target 1.3550 ahead of UK manufacturing PMI?

• DXY consolidates near 3-month lows.
• Oil-price rally underpins.
• The UK manufacturing PMI eyed.

The bid tone around the GBP/USD pair weakened slightly in the Asian trades on the first trading session of this year, leaving the rates defending mild gains ahead of 1.35 handle.

GBP/USD: Macro news back in focus

A positive surprise delivered by the Chinese Caixin manufacturing PMI data lifted the risk sentiment across Asia, aiding the risk currency, the GBP, to keep the buoyant tone intact above the 1.3500 mark.

More so, the pound also benefits from the rally in oil prices while ailing US dollar across its main competitors amid tumbling Treasury yields also continue to offer support to Cable. The USD index failed to sustain the recovery above the 92 handle and drifted lower towards 3-week lows of 91.80 reached last Friday.

However, the spot remains the 1.3550 barrier amid renewed Brexit jitters and expectations of a softer UK manufacturing PMI reading due to be reported later today.

Valeria Bednarik, Chief Analyst at FXStreet noted: For the next one, attention will focus on the UK December PMIs, with softer-than-expected figures probably weighing the pair lower. Technically, the latest advance reversed the negative tone that ruled the pair for most of December, and further gains seem likely, particularly on a break above 1.3550, where the pair topped late November.”

GBP/USD Technical Levels

Bednarik added: “In the daily chart, technical indicators advance within positive territory, while the price advances above an anyway flat 20 SMA. Shorter term, and according to the 4 hours chart, the risk also leans towards the upside, as technical indicators consolidate near their recent highs with no directional strength, while the 20 SMA gained upward strength, some 10 pips below the current level. Support levels: 1.3490 1.3460 1.3420. Resistance levels: 1.3550 1.3595 1.3650.”