GBP/USD slips below 1.3100 handle, fresh session lows ahead of FOMC

   •  A strong follow-through USD recovery exerts prompts some profit-taking.
   •  Investors also seemed to have fully digested the recent Brexith optimism. 
   •  Traders now look forward to the latest FOMC policy decision for fresh impetus.
 
The GBP/USD pair finally broke down of its Asian/early European session consolidation phase and broke below the 1.3100 handle in the last hour, erasing previous session's up-move to three-week tops. 

After an initial uptick to mid-1.3100s, the pair met with some fresh supply and snapped three consecutive days of winning streak amid a strong follow-through US Dollar buying interest. Investors looked past the US midterm election results and the greenback recovered further from 2-1/2 week lows, which was eventually seen as one of the key factors prompting fresh selling around the major.

Meanwhile, market participants also seemed to have digested the latest Brexit optimism, with a report, via the Sun, saying that the UK PM May could ask for more time to cut a Brexit deal with Cabinet, exerting some additional downward pressure on the British Pound. 

In the latest Brexit-related news, via Reuters - citing a government source, the UK Cabinet meeting on Brexit seems unlikely to take place ahead of next week and cast fresh doubt over the sticking point of Irish backstop.

In addition to this, traders also seemed inclined to lighten their bullish positions ahead of today's key event risk - the latest FOMC monetary policy update, and especially after the recent upsurge of over 450-pips from sub-1.2700 level touched on Oct. 31.

Technical levels to watch

A subsequent fall below overnight swing low level of 1.3073 is likely to accelerate the slide back towards 50/100-day SMA confluence support near the 1.3035-30 region before the pair eventually drops to the key 1.30 psychological mark. 

On the flip side, the 1.3125 level now becomes an immediate hurdle, above which the pair is likely to surpass the 1.3175-80 supply zone and aim towards reclaiming the 1.3200 en-route its next major hurdle near the 1.3220-25 region.