GBP/USD retreats farther below 1.3100 handle, fresh session lows

   •  A goodish pickup in the USD demand prompts some long-unwinding trade.
   •  Resurgent US bond yields remain supportive of the strong USD bid tone.
   •  Brexit news further weighs on the GBP and adds to the downward pressure.

The GBP/USD pair faded knee-jerk bullish spike to fresh six-week tops and quickly retreated over 60-pips in the last one-hour or so.

With investors still digesting a report published in the Financial Times, saying that the UK’s opposition Labour party is set to vote against the UK PM Theresa May’s Brexit deal, a disappointing release of the US monthly retail sales data provided a goodish lift during the early North-American session.

The disappointing headline readings were offset by upward revisions of the prior month's already solid figures. The US Dollar quickly reversed course and was further supported by a goodish upsurge in the US Treasury bond yields

In fact, the 10-year benchmark yield touched the 3.00% mark in the last minute and remained supportive of some renewed USD buying interest, which now seems to have prompted some aggressive long-unwinding trade over the past couple of hours. 

It, however, remains to be seen if the current pull-back marks the end of the recent positive momentum or is solely led by some profit-taking on the last trading day of the week, especially after this week's strong gains of nearly 250-pips.

Technical levels to watch

A subsequent retracement is likely to find support near mid-1.3000s, which if broken might negate prospects for any further up-move and turn the pair vulnerable to slide further towards the key 1.30 psychological mark.

On the flip side, momentum back above the 1.3100 handle now seems to confront some fresh supply near the 1.3120-25 region, above which the pair seems all set to aim towards testing 100-day SMA hurdle near the 1.3180 region.
 

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