GBP/USD slides further below 1.3100 mark, fresh session lows

The GBP/USD pair extended its intraday pullback from two-week tops and dropped to fresh session lows in the last hour, further below the 1.3100 mark.

The pair initially gained some positive traction and climbed to the highest level since January 7 following the release of mostly upbeat UK PMI prints. In fact, the gauge for the manufacturing sector rose to its strongest level since April and the services PMI jumped to its highest level since September 2018.

Pound witnesses an intraday turnaround

Friday's data added to the recent optimism and prompted investors to scale back their bets for an imminent BoE rate cut at its upcoming meeting on January 30. The pair touched an intraday high level of 1.3170 but failed to capitalize on the momentum, rather met with some fresh supply at higher levels.

The fact that the market is still pricing in 45% chances of a rate cut next week seemed to be one of the key factors behind the pair's turnaround. This coupled with some renewed US dollar buying interest added to the selling bias and contributed to the intraday downfall of around 100 pips.

It will now be interesting to see if the pair is able to attract any buying interest at lower levels or the current pullback marks the end of the recent positive move. Market participants now look forward to the release of the flash Manufacturing and Services PMI in order to grab some short-term trading opportunities.

Technical levels to watch