GBP/USD sticks to strong gains near 3-month tops despite softer UK PMI

   •  UK manufacturing PMI eases more than expected.
   •  Persistent USD selling helps offset weaker reading.

The GBP/USD pair held on to its strong gains near 3-month highs, albeit struggled to gain any follow-through traction post-UK manufacturing PMI.

Currently placed marginally above mid-1.3500s, the pair had a rather muted reaction to today's weaker UK manufacturing PMI print, which eased more than expected to 56.3 in December as against 58.0 expected and previous month's reading of 58.2.

The market seems to have largely ignored the softer reading, with the prevalent bearish sentiment surrounding the US Dollar, led by a sharp slide in the US Treasury bond yields, acting as an exclusive driver of the pair's strong bid tone at the start of 2018.

In absence of any major market moving economic releases due from the US on Tuesday, this week's other important macroeconomic releases from the UK and the US, scheduled at the beginning of a new month, would take the lead later this week and help investors determine the pair's next leg of directional move.

Technical levels to watch

The momentum seems strong enough to continue boosting the pair towards 1.3580 intermediate resistance en-route the 1.3600 handle. On the flip side, 1.3530 level, followed by the key 1.3500 psychological mark, now seems to protect the immediate downside, which if broken could accelerate the slide back towards 1.3475-70 support zone.