GBP/USD deflates to 1.3320, dollar picks up

After a brief test of highs near the 1.3380 area, GBP/USD has now erased part of those gains and has returned to the 1.3325/20 band.

GBP/USD gives away gains as USD trims losses

Spot met a bout of selling pressure after breaking above the critical resistance band at 1.3370/75 today, where it is located August’s top at 1.3373.

GBP gained further ground after key UK’s Services PMI have surpassed estimates during August, coming back to the expansion territory and reverting July’s concerning drop at the same time.

In the meantime, the pair keeps its positive streak well and sound for the time being, additionally propped up by extreme speculative positioning, as GBP net shorts remained at extreme levels in the week ended on August 30.

GBP/USD levels to consider

As of writing the pair is gaining 0.23% at 1.3326 and a breakout of 1.3375 (high Sep.5) would open the door to 1.3481 (high Jul.15) and then 1.3646 (38.2% of the post-Brexit down move). On the other hand, the immediate support lines up at 1.3224 (55-day sma) followed by 1.3127 (20-day sma) and finally 1.2863 (low Aug.15).