GBP/USD drops to 3-week lows, farther below 1.30 mark post-UK PMI

   •  Resurgent USD demand prompts some fresh selling on Tuesday.
   •  Disappointing UK construction PMI adds to the downward pressure.

The GBP/USD pair weakened farther below the key 1.30 psychological mark and dropped to three-week lows post-UK macro data.

With investors looking past overnight news that the UK might compromise on Irish border to get a Brexit deal, the pair extended its retracement slide from levels beyond the 1.3100 handle and was being weighed down by a goodish pickup in the US Dollar demand. 

The downward momentum accelerated further, dragging the pair to an intraday low level of 1.2975, following the release of UK construction PMI, which fell to 52.1 in September from previous month's reading of 52.9 and worse than 52.5 expected.

With today's UK macroeconomic data out of the way, market participants now look forward to the Fed Chair Jerome Powell's scheduled speech for some fresh impetus. In the meantime, any fresh Brexit-related news/developments might continue to infuse volatility across the GBP pairs. 

Technical levels to watch

A follow-through selling has the potential to continue dragging the pair further towards the 1.2930-25 intermediate support en-route the 1.2900 handle. On the flip side, any meaningful recovery back above the 1.30 handle now seems to confront fresh supply near the 1.3035 area, above which the pair is likely to aim towards reclaiming the 1.3100 round figure mark.