GBP/USD stable above 1.3200 handle post US data

The GBP/USD pair faded upbeat UK PMI-led bullish spike to fresh 10-month highs, around 1.3240 level, and dipped below the 1.3200 handle. The dip, however, was bought into and the pair rose back to 1.3210 level post US economic releases. 

Earlier during European session, the pair jumped to the highest level since September 2016 after the latest UK manufacturing PMI printed a stronger reading of 55.1 for July, above June's 54.2 and 54.3 anticipated. The pair, however, retreated from higher levels amid broad based US Dollar recovery move, which lost steam following the mixed personal income/spending data and core PCE price index.

According to the data released just a while ago, the core PCE Price Index - the Fed's preferred inflation gauge, which although showed a flat m-o-m reading but the yearly rate snapped four months of continuous decline and ticked higher to 1.5% for June, still below the 2% target. The disappointment, however, came from personal income growth, which unexpectedly remained flat in June and subdued personal spending growth of 0.1% during the reported period.

Mixed US economic data failed to provide any additonal boost to the greenback recovery move and helped the pair to hold its neck above the 1.3200 handle, at least for the time being. Today’s US economic docket also features the release of ISM manufacturing PMI, which is expected to have retreated to 56.4 in July as against previous month’s reading of 57.8.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, “the pair can extend up to 1.3280, where it has multiple intraday highs from August last year, ahead of the 1.3330 region. The daily low of 1.3190 is the immediate support, with a break below it opening doors for a downward corrective movement towards the 1.3140/50 price zone.”