GBP/USD clings to gains near 1-week tops, comfortably above 1.2700 mark post-UK PMI

   •  The prevailing USD selling bias helps build on the recent bounce from multi-month lows.
   •  Upbeat UK services PMI print provides an additional boost and remained supportive.
   •  Traders now eye US ADP report and ISM non-manufacturing PMI for some fresh impetus.

The GBP/USD pair held on to its mildly positive tone and climbed to over one-week tops, around the 1.2720-25 region post-UK services PMI.

The pair built on its recent bounce from multi-month lows and continued gaining positive traction for the fourth consecutive session, supported by the prevailing US Dollar selling bias amid increasing bets for an eventual Fed rate cut by the end of this year.

The positive momentum got an additional boost following the release of better than expected UK services PMI, which jumped to 51.0 in May as against 50.6 expected and reflected a sharp acceleration in the UK services sector activity. 

The GBP bulls further took cues from the latest optimism over the post-Brexit trade relations with the US, especially after the US President Donald Trump on Tuesday said that we’ll have a very substantial trade deal with the UK.

It, however, remains to be seen if the pair is able to capitalize on the positive move or runs into some fresh supply at higher levels amid persistent UK political certainty and growing fears of a no-deal Brexit.

Later during the early North-American session, the US economic docket - highlighting the release of ADP report on private sector employment and ISM non-manufacturing PMI, might further collaborate towards producing some meaningful trading opportunities.

Technical levels to watch