GBP/USD powers through 1.2600 handle, jumps to three-week highs

The GBP/USD pair shrugged-off disappointing UK manufacturing PMI and powered through 1.2600 handle to hit a three week high. 

Currently trading comfortably above 1.2600 handle, around mid-1.2600s, the pair caught fresh bids after comments from UK Brexit minister David Davis receded fears of a 'hard Brexit'. Davis said that UK might consider EU budget payments, if required, in order to have full access to EU markets and negated an unexpected drop in UK manufacturing activity. The Markit UK manufacturing PMI fell to 53.4 in November, down from 54.2 recorded in October. Consensus estimates were pointing to a rise to 54.5. 

Meanwhile, extension of the greenback's near-term consolidation phase, as investors cautiously await for Friday's monthly jobs report (NFP), is further supportive of the pair's strong up-move on Thursday. Moreover, possibilities of stops getting triggered on a decisive move might have also contributed to the pair’s sharp up-surge in the past hour. 

Later during NA session, weekly jobless claims and ISM manufacturing PMI from the US would now be looked upon for some respite for the US Dollar and eventually provide some impetus for the major.

Technical levels to watch

From current levels, Nov. monthly high near 1.2675 area is likely to act as immediate hurdle before the pair darts towards its next resistance near 1.2700 round figure mark. On the downside, 1.2600 handle now becomes immediate support to defend, which if broken is likely to drag the pair back towards 1.2500 psychological mark.