GBP/USD could extend retreat towards 1.2950 on poor UK PMI

The GBP/USD pair failed once again at 1.3030 levels and embarked upon a minor-corrective slide in the Asian trades, as the bulls take a back seat ahead of the UK manufacturing PMI release.

GBP/USD looks vulnerable below 1.3000

The spot snapped a four-day winning streak and turned negative amid a better sentiment seen toward the greenback against its main competitors, as the USD bulls extend Friday’s relief-rally heading into the much-awaited FOMC minutes slated for release later this week.

In the meantime, the GBP/USD pair extends its corrective-mode, as the bears remain control amid expectations of a deceleration in the UK’s manufacturing sector activity for the month of June. The UK PMI data is expected to arrive at 56.4 versus 56.7 seen previously.

Last week, Cable booked the biggest weekly gain in 10 weeks amid a hawkish twist delivered by the BOE Governor Carney and Chief Economist Haldane, while “ironically, it is only the US, which has seen core CPI and core PCE move lower for four consecutive months that the market doubts.  Using either the Fed funds futures or the OIS market, it appears that less than a 50% chance of hike before the end of the year is discounted, “ Marc Chandler, Global Head of Currency Strategy at BBH argued.

Looking ahead, we have a busy week for both the UK and US traders, which will set a fresh tone for the markets for the coming days, especially after the last two weeks of data-light economic calendar.

Week ahead in Europe: UK PMI surveys, German factory orders eyed - Nomura

 Week ahead in the US: Watch for FOMC minutes and NFP - Nomura

GBP/USD levels to consider             

To the upside, the immediate resistance is the 1.3030 (5-week tops) followed 1.3050 (psychological mark/ May tops) and then 1.3100 (round figure). On the downside, support could be located at 1.2995 (5-DMA), 1.2946 (Jun 30 low) and 1.2917 (Jun 29 low).