GBP/USD Forecast: recovery move already seems to have run out of steam, UK/US PMIs eyed

The British Pound gained some positive traction on Friday and was supported by an upward revision of the UK GDP print, coming in to show a growth of 0.2% during the first quarter of 2018 as against 0.1% estimated earlier. This coupled with the ongoing US Dollar corrective slide provided an additional boost and lifted the GBP/USD pair back above the 1.3200 handle.

The up-move quickly ran out of steam at the start of a new trading week, with some renewed USD buying interest prompting some weakness during the Asian session. The greenback built on its recent gains of over 5% in the second quarter, marking its strongest quarterly performance since late 2016, and was eventually seen capping any additional gains for the major.

Against the backdrop of uncertainties around Brexit negotiations, investors now look forward to heavyweight economic data, scheduled at the start of a new month, in order to determine the pair's next leg of directional move. The busy week kicks off with the release of manufacturing PMIs from the UK and the US and will be looked upon to grab some meaningful trading opportunities. 

From a technical perspective, the pair seems to have formed a descending trend-channel on short-term charts but has struggled to sustain above the 1.3200 round figure mark. A follow-through buying beyond the mentioned handle has the potential to lift the pair towards reclaiming the 1.3300 mark en-route the descending channel resistance, currently near the 1.3350-60 region.

On the flip side, any meaningful retracement now seems to find immediate support near the 1.3100 handle, below which the fall could further get extended back towards testing the trend-channel support, currently near the 1.3035 region, or fresh YTD lows. A follow-through weakness below the mentioned supports would mark a fresh bearish breakdown and pave the way for an extension of the pair's bearish trajectory.