GBP/USD tumbles to 1.34 neighborhood and rebound, NFP in focus

   •  Fails to gain traction beyond 1.35 mark. 
   •  Latest Brexit headlines aggravate profit-taking slide.
   •  US NFP report will be looked for fresh impetus. 

The GBP/USD pair extended its retracement slide and tumbled to the 1.3400 neighborhood in the last hour, albeit quickly retreated few pips thereafter.

With markets looking past the latest positive Brexit news, wherein the UK reached a historic deal on its EU exit terms, a goodish pickup in the US Dollar demand helped negate today's in-line/better-than-expected UK data and prompted some profit taking at higher levels.

The slide accelerated further on flash news that an EU official don't see Brexit trade talks to start immediately in 2018 and it would be realistic to expect UK trade deal by March 2019.

Meanwhile, the release of NIESR GDP estimate, pointing to a better-than-expected growth of 0.5% over 3-months to November, passed unnoticed, with Brexit headlines acting as an exclusive driver of the pair's good two-way moves on the last trading day of the week. 

Traders now look forward to the keenly watched US monthly jobs report (NFP) for some fresh impetus. Against the backdrop of optimism over the US tax reform plan and passage of a legislation to temporarily fund the US government through December 22, a strong NFP figure would pave the way for an extension of the pair's corrective slide.

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes: "The 4 hours chart shows that the price is breaking below its 20 SMA which converges with a Fibonacci level at 1.3430, while the RSI indicator turned lower, now at 48, as the Momentum hovers around its mid-line. The main support is now 1.3390, with a break below it opening doors for a steeper decline towards 1.3345, the 61.8% retracement of its latest bullish run, ahead of the 1.3300 figure."