GBP/USD probing daily lows around 1.2550 ahead of data

The Sterling is trading on a bearish note on Wednesday, with GBP/USD giving away part of yesterday’s strong advance and returning to the mid-1.2500s.

GBP/USD looks to PMI

The upside momentum in the pair seems to have run out of legs just ahead of the critical 1.2600 barrier, always backed by the persistent selling bias around the greenback.

In fact, Tuesday’s comments from President D.Trump targeting Germany, Japan and China – always against the backdrop of trade issues – have fully impacted on the buck, triggering a sharp sell off and the subsequent strong rebound in the risk-associated space.

Later in the session, UK’s Manufacturing PMI measured by Markit is expected to have eased a tad to 55.9 during January, while the employment report by ADP and the ISM Manufacturing should take centre stage in the US docket ahead of the FOMC meeting.

GBP/USD levels to consider

As of writing the pair is retreating 0.18% at 1.2559 facing the next support at 1.2478 (100-day sma) followed by 1.2410 (low Jan.31) and finally 1.2375 (20-day sma). On the flip side, a break above 1.2604 (high Jan.30) would aim for 1.2614 (high Jan.27) and then 1.2680 (high Jan.26).