GBP/USD bounces off two-week highs, bulls shrug off optimistic UK PMI

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GBP/USD bounces off two-week highs, bulls shrug off optimistic UK PMI

  • UK Manufacturing and Services PMIs beat market expectations.
  • GBP/USD bulls failed to benefit from the positive intraday movement.

The GBP/USD pair has wiped out an intraday bullish rally to fresh 2-week highs, levels well above mid-1.3100s, and has now slipped back to the lower end of its intraday range.

After a modest pullback in the previous session, the pair managed to regain some positive momentum on the last day of the week and the rally got a slight boost after the stronger-than-expected UK PMI readings.

In fact, the quick version of the UK Manufacturing PMI for January came close to expansion territory and came to 49.8 compared to the expected recovery to 48.9 and the previous month's final reading of 47.5.

In addition, the UK Services PMI beat market expectations by printing a reading of 52.9 for January and prompting traders to scale back their expectations for a BoE rate cut at its policy meeting next week.

Despite the supporting factors, the pair failed to capitalize on the positive momentum, rather faced some solid supply at higher levels and quickly fell around 45-50 pips over the past hour or so.

It will now be interesting to see if the pair is able to attract any buying of the dips at lower levels or if the current pullback marks the end of the recent positive momentum and the resumption of the previous corrective decline.

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