GBP/USD dips to 1.3300 handle ahead of UK services PMI

As the European trading session got underway, the GBP/USD pair’s retracement from multi-week high seems to have gained traction and has now dragged the pair close to 1.3300 handle ahead of UK services PMI.

Despite of its retracement during early Asian session, the GBP/USD pair has managed to hold its neck above 1.3300 handle and is now trading slightly off session low around 1.3320-25 region ahead of UK services PMI.

On Tuesday, UK construction PMI showed contracting activity in the UK construction sector. The reading was better-than what consensus estimates were pointing to and triggered a bout of short-covering rally in the GBP/USD pair. 

The greenback selling pressure got further aggravated after in-line with estimates Core PCE Price Index and personal spending data failed to impress the market, which now seems to be discounting a negligible possibility of an eventual Fed rate-hike in 2016.

Next in focus would services PMI prints from the UK, during European session, and from the US, later during NA session. From the US, release of ADP report on private sector employment will also grab investor attention and provide some near-term momentum play for traders.

However, key event risk for the pair's near-term movement would be Thursday's key BOE monetary policy decision.

Technical levels to watch

On the immediate upside, bullish momentum back above 1.3350 immediate resistance is likely to boost the pair immediately towards 1.3475-80 resistance, above which the pair seems all set to extend its near-term recovery trend, even beyond 1.3500 psychological mark, towards its next major resistance near 1.3550 area.

On the flip side, sustained weakness below 1.3300-1.3280 immediate support, the pair is likely to extend its slide immediately towards 1.3250 support ahead of an important support near 1.3200 round figure mark.