The GBP/USD maintained its strong bid tone and jumped to 1.3300 neighborhood before retracing few pips to currently trade around 1.3275-70 band after the release of US economic data. 

Data released from US showed Core PCE Price Index, Fed preferred inflation gauge, rising in-line with estimates by 0.1% m-o-m in June and on yearly basis the index remained unchanged at 1.6%. Meanwhile, US personal spending for June also remained unchanged at 0.4% but was slightly better-than 0.3% expected.

The data halted further selling pressure around the greenback but has failed to provide any immediate respite. A broad US Dollar weakness has been the key factor for the pair’s up-move on Tuesday. 

The British Pound got an additional support from lower-than-expected fall in UK construction PMI data, coming-in at 45.9 as compared to expected 44.2 and 46.0 recorded in June. 

Further upside from current levels, now seem limited ahead of this week’s key BOE monetary policy decision, where the central bank is expected to go ahead and announce a 25 bps points. However, market participants remain divided over the possibilities of further quantitative easing measures, which seem to fuel uncertainty before Thursday’s even risk. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "the 4 hours chat shows that the price is now above an horizontal 20 SMA, while the technical indicators aim modestly higher above their mid-lines, lacking enough momentum to confirm further gains. Nevertheless, some follow through the mentioned high could see the pair testing the mentioned Fibonacci resistance at 1.3320."

"Below 1.3200 on the other hand, the pair can slide down to 1.3160, with a downward acceleration below this last exposing the 1.3100/20 region."