GBP/USD rebounds from lows, approaches 1.2850

After bottoming out in the 1.2815/10 band in early trade, GBP/USD has now regained some attention and it has returned to the mid-1.2800s.

GBP/USD focus on PMI

Spot met a wave of selling pressure on Monday following comments by PM T.May over the weekend. May argued that the crucial Article 50 could be invoked by end of March, prompting ‘Brexit’ fears to re-emerge and weigh on sentiment.

The pair has given away over a cent at the beginning of the week, from daily tops in the mid-1.2900s to Monday’s lows near 1.2810. Auspicious results from September’s manufacturing PMI in the UK economy did little-to-nothing to curb the bearish sentiment already installed among traders.

Ahead in the session, UK’s Construction PMI is expected to ease a tad to 49.0 for the last month from 49.2 seen in August, while the IBD/TIPP Economic Optimism index is only due across the pond.

It is worth recalling that GBP speculative net shorts have climbed to 3-week highs along with Open Interest during the week ended on September 27, according to the latest CFTC report.

GBP/USD levels to consider

As of writing the pair is up 0.05% at 1.2843 facing the next support at 1.2815 (low Oct.3) ahead of 1.2796 (2016 low Jul.6). On the other hand, a breakout of 1.3062 (20-day sma) would aim for 1.3125 (high Sep.22) and finally 1.3274 (high Aug.24).