GBP/USD capped by 1.5380

FXstreet.com (Edinburgh) -It seems today’s upside in the GBP/USD has found a tough hurdle around 1.5380, putting a momentary lid to the PMI-induced rally.

GBP/USD fundamentals keep improving

The Services PMI in the UK climbed to 60.2 during July, exceeding both the median (57.2) and June’s reading (56.9), extending the positive momentum of the British economy, ahead of the BoE’s Quarterly Inflation Report due on Wednesday. “This will contain the MPC's latest economic forecasts while also publishing proposals on forward guidance… The stronger the guidance, the greater the risk will be that investors see the BoE as tolerating above-target levels of inflation to support the economy's recovery. That will weigh on the pound”, assessed Mansoor Mohi-uddin, Director of FX Strategy at UBS.

GBP/USD levels to watch

As of writing the pair is up 0.41% at 1.5356 with the next hurdle at 1.5416 (high Jul.26) ahead of 1.5435 (high Jul.25) and then 1.5480 (high Jun.25). On the flip side, a breakdown of 1.5259 (low Aug.5) would open the door to 1.5254 high Jul.31) and finally 1.5243 (high Aug.1).