• Weaker UK data prompts some profit-taking.
• Goodish USD rebound adds to the pressure.
• US ISM PMI eyed ahead of FOMC minutes.
The GBP/USD pair extended its retracement from 3-1/2 month tops and has now dropped to fresh session lows, around the 1.3580-70 band.
The pair failed to build on its early up-move beyond the 1.3600 handle and met with some fresh supply following the release of weaker UK construction PMI print, which added to disappointment from Tuesday's softer manufacturing sector activity data.
Adding to this, a pickup in the greenback demand, with the key US Dollar Index staging a goodish rebound from multi-month lows, prompted some additional profit-taking and further collaborated to the pair's retracement through the European session on Wednesday.
From a technical perspective, the pair is retreating from an important technical barrier marked by 61.8% Fibonacci expansion level of 1.3062-1.3550 up-move and subsequent retracement. Hence, it would now be interesting to see if traders continue unwinding their positions ahead of today's important releases from the US.
Today's US economic docket features the release of ISM manufacturing PMI but is likely to be overshadowed by some repositioning trade ahead of the December FOMC meeting minutes, which would help investors to evaluate possibilities of 3 Fed rate hike moves in 2018 and eventually provide a fresh directional impetus.
Technical levels to watch
Immediate support is pegged near 1.3550-45 area, below which the corrective slide could get extended towards the key 1.35 psychological mark en-route the 1.3475 horizontal support.
On the upside, the 1.3600 handle now becomes an immediate hurdle, which if cleared should help the pair to build on its bullish momentum back towards Sept. 2017 swing highs resistance near the 1.3655-60 region.
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