GBP/USD recovers a major part of early lost ground to 20-month lows

   •  The USD fails to preserve gains and helped stage a solid rebound from 20-month lows.
   •  The UK construction PMI comes in at 52.8 vs. 52.9 expected but does little to influence.
   •  Traders now look forward to the US economic docket for some fresh trading impetus.

The GBP/USD pair has managed to recover a major part of the early lost ground to near 20-month lows and is currently placed at the top end of its daily trading range post-UK PMI.

The pair initially extended overnight sharp retracement slide and tumbled to sub-1.2400 level, the lowest since April 2017, during the Asian session in a knee-jerk reaction to a fresh wave of global risk aversion trade. 

The global flight to safety underpinned the US Dollar's relative safe-haven demand against its British counterpart, which coupled with relatively thin liquidity conditions triggered a flash crash.

However, the greenback struggled to preserve early gains, which eventually turned out to be one of the key factors that helped the pair to catch some fresh bids and recover around 180-pips from daily swing lows.

Meanwhile, a slight miss from the latest UK construction PMI, coming in at 52.8 for December as compared to 52.9 expected, did little to impress the bulls and provide any meaningful bullish impetus.

It, however, remains to be seen if the pair is able to extend the recovery momentum or meets with some fresh supply at higher levels as market participants look forward to the US economic docket for fresh impetus.

Technical levels to watch