GBP/USD plunges to fresh two-week lows

The GBP/USD pair failed to build on recovery move and has now dropped to a fresh session low, extending its weakness back below 1.2400 handle.

Currently trading with bearish bias for the fifth straight session, around mid-1.2300s, the pair ran through fresh offers at higher levels after comments from couple of FOMC members - James Bullard and Robert Kaplan, reiterated Fed Chair Janet Yellen's view (during her testimony on Thursday) that the central bank is ready to tighten its accommodative monetary policy and reinforced consensus expectations of December Fed rate-hike action. 

Earlier on Friday, the pair recovery beyond 1.2400 handle after comments from BoE MPC member Ben Broadbent that above-target inflation, led by sharp depreciation of the British Pound, would provide little room for the central bank to do more in order to counter a projected rise in unemployment. The pair's recovery momentum, however, turned out to be short-lived and the pair tumbled to fresh two week low. 

Later during NY session, speeches by New York Fed President William Dudley and Kansas City Fed President Esther George would provide fresh impetus for the pair's next leg of move during US trading session.

From technical perspective, the pair is trading closer to 20-day SMA support. Hence, a decisive break below this immediate support would turn the pair vulnerable to extend its reversal from 50-day SMA touched at the end of previous week. 

Technical levels to watch

On a sustained break below 20-day SMA support near 1.2365 region, the pair is likely to immediately dart towards 1.2300 handle before eventually dropping to test a short-term ascending trend-channel support near 1.2250-45 region. On the upside, any recovery attempts might now confront resistance at 1.2400 round figure mark above which the pair is likely to surpass 1.2435 area (session peak resistance) and aim towards reclaiming 1.2500 psychological mark.

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