GBP/USD rebounds to 1.2730, ADP eyed

After dropping in fresh multi-decade lows near 1.2680 in early trade, GBP/USD has now regained 1.2700 the figure and above.

GBP/USD bid post-PMI, looks to ADP

The pair met some buying interest after UK’s Services PMI has surprised markets to the upside for the month of September, rising to 52.6 vs. 52.0 expected albeit a tad lower than August’s 52.9.

Despite regaining the positive territory so far today, the demand for GBP remains subdued and spot is expected to trade under heavy pressure against the backdrop of heightened risks on the potential consequences of ‘Brexit’. Recall that PM T.May has vowed over the weekend to trigger the critical Article 50 at some point in march 2017.

Ahead in the day, the US ADP report is expected to show the private sector has added 166K jobs during last month, ahead of the results from August’s Trade Balance, Markit’s Services PMI, Factory Orders and the ISM Non-manufacturing.

Adding to GBP weakness, speculators have increased their net short positions to 3-week highs during the week ended on September 27, while Open Interest increased by around 15K contracts, according to the latest CFTC report.

GBP/USD levels to consider

As of writing the pair is up 0.09% at 1.2736 with the next up barrier at 1.3047 (20-day sma) ahead of 1.3113 (55-day sma) and finally 1.3125 (high Sep.22). On the downside, the next support is located at today’s low at 1.2686.