GBP/USD spikes to session peak near 1.29 handle

After an initial knee-jerk slide on the back of blowout ADP report, the GBP/USD pair regained traction and spiked to fresh session tops near the 1.2900 handle despite of upbeat manufacturing data from the US.

According to the US data released just a while ago, ISM manufacturing PMI unexpectedly ticked higher to 54.9 in May, from April's 54.8 and was marginally better-than 54.5 expected. This coupled with the latest read on private-sector employment, surpassing even the most optimistic estimates, failed to provide any additional boost to the US Dollar's recovery move. 

A slight disappointment from the US weekly jobless claims, painting a mixed picture for Friday's official jobs report, seems to one of the factor that might have prompted some short-covering and collaborated to the pair's sharp recovery move during early NA session.

Meanwhile, market seems to have digested today's slightly better-than-expected UK manufacturing PMI, with the greenback price-dynamics and political developments ahead of the UK general election on June 8 acting as key determinants of the pair's momentum through early NA session on Thursday.

   •  UK: Don't be misled by sterling stability, investors are concerned - BBH

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The pair is technically neutral, with the price just a few pips above its 20 SMA and 200 EMA, both converging in the 1.2840 region, and technical indicators heading nowhere around their mid-lines. As long as the 1.2800/1.2920 range persists, little could be expected ahead of elections, with a clear break below 1.2760 required to confirm a bearish extension."