GBP/USD: Recovery falters just shy of 1.3400 ahead of UK PMIs
|- GBP/USD recovers nearly 90-pips from Friday’s NY low of 1.3306.
- Brexit optimism to keep the sentiment lifted around the pound.
- Focus remains on the UK Markit Preliminary PMIs ahead of BOE.
The pound remains supported by the UK PM Johnson’s commitment to sailing the UK out of the European Union (EU) swiftly before January 31st, 2020 after his Conservatives Party secured a landslide majority in the historic election held last Thursday.
On Monday, PM Johnson will welcome 109 new Conservative lawmakers to parliament and will reiterate his promise to boost funding to the state health service as well.
UK PMI Preview: GBP/USD bulls to target 1.35 handle on improved data
Further, the GBP/USD pair is also buoyed by the increased expectations of an improvement in the UK’s manufacturing sector activity, as the Markit Preliminary Manufacturing PMI for December is seen arriving at 49.4 vs. 48.9 previous. The country’s Services PMI is expected to arrive at 49.6 vs. 49.3 last.
On the USD-side of the equation, markets remain unimpressed by the details of the US-China Phase One trade deal reached last Friday that capped the recovery in the US dollar across its main competitors. The US dollar index now tests the 97 handle, retreating from Friday’s NY highs of 97.24.
At the time of writing, the Cable trades with sizeable gains of +0.50% around 1.3390, having stalled its correction from 19-month highs of 1.3515 just ahead of the 1.33 handle.
Looking ahead, the GBP bulls will keep up the charge as the UK looks to clear the Brexit Withdrawal Agreement in the parliament before Christmas while the Bank of England (BOE) could signal a readiness to alter course on the monetary policy, with the UK election out of the way.
GBP/USD Technical levels to watch
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