The GBP/USD pair held on to its recovery gains, albeit struggled to build on early up-move and remained stuck within 15-20 pips narrow trading range around the 1.2400 handle.
The pair on Monday staged a goodish recovery despite of post-NFP US Dollar recovery move from 5-month lows touched on Monday. Growing Fed rate-hike expectations in wake of an unexpected drop in the unemployment rate, and robust average hourly earnings growth, helped the key US Dollar Index to hold above the 101.00 handle, closer to near 3-week highs touched during Asian session on Monday.
In absence of any major market moving economic releases, the pair's recovery move could be solely attributed to some short-covering from near-term oversold conditions, from nearly three-week lows.
The pair, however, has failed to build on to its momentum further beyond the 1.2400 handle amid lack of follow through buying interest as market participants seemed to keenly await the Fed Chair Janet Yellen's scheduled speech, later during the NY session for fresh impetus.
Technical levels to watch
From current levels, immediate resistance is seen near 1.2425 level, above which the pair is likely to extend the recovery momentum further towards the 1.2445-50 region. On the flip side, retracement back below 1.2370 immediate support now seems to turn the pair vulnerable to accelerate the slide towards 1.2325 horizontal support ahead of the 1.2300 handle.
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