GBP/USD drops and pops on UK PMI, NFP eyed

The GBP/USD pair stalled its upbeat momentum and fell back towards 1.44 handle, before recovering ground towards 1.4430, where it hovered pre-UK PMI release.

GBP/USD: Holds above 1.4400

Currently, GBP/USD recovered losses and now trades modestly flat at 1.4427, having found fresh bids near 1.4410 region. The cable regained poise after a knee-jerk 20-pips drop  towards 1.44 handle, as markets gradually digest better-than expected UK services PMI data.

The final services Purchasing Managers' Index (PMI) in the UK rose to 53.5 points in May, after having unexpectedly dropped to 52.3 points in April. Markets had predicted an increase of 52.5 points.

However, further upside remains capped as investors remain cautious heading into the US employment data, which is likely to spur huge volatility into markets and could cause extreme moves in the greenback.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.4436/69 (50 & 5-DMA) , above which 1.4500 (Round number) would be tested. On the flip side, support is seen at 1.4358 (100-DMA) below that at 1.4310 (Daily S3).