GBP/USD better bid, but capped by 1.2500 ahead of UK PMI

The GBP/USD pair is seen on a steady recovery path so far this session, with the bulls now trying hard to regain 1.25 handle amid moderate risk-aversion.

Cable peeks into the green amid subdued treasury yields, in the wake of lack-luster US manufacturing PMI reports released a day before. However, the recovery gains appear capped amid negative equities, as risk-off extends into Asia.

Moreover, the sentiment around the pound remains somewhat undermined, as yesterday’s poor UK manufacturing PMI report continues to weigh. The UK manufacturing PMI for March arrived at 54.2 versus 55.1 expectations and 54.6 last.

Focus now shifts towards the UK construction PMI data due later in the European session for fresh impetus on the spot. Also, the US trade and factory orders data will be closely eyed for next direction on the buck.

GBP/USD Levels to consider            

Valeria Bednarik, Chief Analyst at FXStreet notes, “The 4 hours chart supports additional declines, as the price is currently developing below its 20 SMA, whilst the Momentum indicator is crossing below the 100 level, and the RSI heading south around 46. Still the pair has a major support around 1.2430, which stands for the 38.2% retracement of the January rally. A break below this last should expose March 29th low of 1.2375, en route to 1.2330 a strong static support. The upside should remain capped by selling interest around 1.2540/60 for the bearish trend to remain in place.”