GBP/USD outlook

Despite the retreat from the Dec 30 high of 1.2388, the subsequent failure to dip below 5-DMA on Monday followed by a rebound from the 5-DMA today suggests the spot could have a re look at 1.2350-1.2388 levels… especially if the UK manufacturing PMI due in few minutes betters estimates.

On the downside, only a daily close below 1.2245 (Dec 30 low) would open doors for a sell-off to 1.22 (Dec 28 low).