GBP/USD defying broad based USD recovery ahead of the Fed

The GBP/USD pair trimmed some of UK PMI-led strong gains to 4-day high after upbeat ADP report, albeit has manage to hold above 1.2600 round figure mark.

Currently trading around 1.2635 region, the pair defied broad based US Dollar recovery led by strong ADP report on the US private sector employment. 

Meanwhile, today's UK manufacturing PMI has been supportive of the pair's strong bid tone, closer to multi-week highs touched on Jan. 26, on increasing prospects of growth and inflation upgrade from BoE on Thursday.

Investors on Wednesday keenly await for the FOMC monetary policy decision in order to gauge possibilities and timing of the next Fed rate-hike action, while grappling with the US President Donald Trump's protectionist stance, especially after yesterday's comments over currency devaluation. 

Preceding the Fed announcement, the US ISM manufacturing PMI print for January might be looked upon for some short-term momentum play.

Technical levels to watch

Momentum back above 1.2650 level might now assist the pair to conquer multi-week highs resistance near 1.2670-75 region and head towards reclaiming 1.2700 handle ahead of resistance near 1.2730-35 horizontal area.

On the downside, weakness towards 1.2600 handle now seems to be bought into and hence, might limit any further downslide near 1.2585-75 support area, which if broken would negate prospects of any further up-move.