GBP/USD Forecast: Grinding Higher On Easing USD Demand, Bearish Bias Remains

The GBP/USD pair continued gaining some positive traction through Asian session on Tuesday and built on Friday's sharp rebound from 2-week lows. The recovery was further supported by a modest US Dollar retracement as investors turned anxious over the appointment of next Fed Chair. However, the pair's advance back above the 1.3200 handle seemed lacking a strong follow-through momentum as investors seemed to refrain from placing aggressive bets ahead of tomorrow's release of the Q3 GDP figures from the UK. In the meantime, the preliminary US Markit manufacturing PMI, due later today and expected to tick higher to 53.6 (from 53.1) in October, might provide some short-term trading impetus. 

Technically, some follow-through buying interest below 1.3230 level has the potential to lift the pair back towards the 1.3270-75 resistance area, marking the 38.2 percent Fibonacci retracement level of the 1.3657-1.3027 recent downfall. Momentum beyond the mentioned hurdle could get extended even beyond the 1.3300 handle towards 50 percent Fibonacci retracement level resistance near the 1.3345-50 region. A decisive breakthrough the mid-1.3300s would now negate any near-term bearish bias and pave way for resumption of the pair's prior appreciating move.

On the flip side, weakness back below the 1.3200 handle now seems to find support at the 23.6 percent Fibonacci retracement level, around the 1.3175 area, ahead of the 1.3150 horizontal level. A convincing break below the mentioned support would turn the pair vulnerable to break below the 1.3100 handle and head towards a test to the 100-day SMA support near the mid-1.3000s.