GBP/USD fades a bullish spike, quickly retreats back below 1.40 handle
| • Sharp European session recovery turns out to be short-lived.
• A follow-through USD buying prompts fresh selling.
• GBP further weighed down by softer UK macro data.
The GBP/USD pair struggled to build on its European session sharp recovery move and quickly retreated around 30-40 pips from session tops.
The pair's goodish rebound of around 85-pips from an intraday low level of 1.3931 lacked any fundamental catalyst and seemed more like cross-driven strength, stemming out of a sharp fall in the EUR/GBP cross.
The up-move quickly ran out of steam and couldn't sustain above the key 1.40 psychological mark amid a strong follow-through US Dollar buying interest. In fact, the greenback continued strengthening across the board and was seen prompting some fresh selling at higher levels.
Meanwhile, the British Pound was further weighed down by softer UK CBI Industrial Order Expectations, dropping to a four-month low level of 10 in February as against previous month's reading of 14.
There aren't any major market-moving economic releases due from the US and hence, the ongoing USD recovery move, further supported by rising US Treasury bond yields, might continue to exert some downward pressure surrounding the major.
Technical levels to watch
Weakness below 1.3930 area now seems to accelerate the slide towards the 1.3900 handle en-route 1.3840-35 horizontal support. On the upside, 1.4010-15 zone might continue to act as an immediate resistance, above which a fresh bout of short-covering could lift the pair back towards reclaiming the 1.4100 handle.
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