GBPUSD tumbles to 2-month lows

The greenback continued gaining traction during early NA session, with the GBP/USD pair on the brink of breaking below 1.2200 handle.

Currently trading around 1.2205-10 region, the pair faced rejection near 1.2300 handle and tumbled to its lowest level in nearly two-months. Tuesday's upbeat US consumer confidence index, which rose to the highest level in 15-years, renewed optimism over stronger US economic growth, and higher inflation, and seems to be only reason behind resurgent greenback buying interest on Wednesday. In fact, the overall US Dollar Index is now crawling back towards last week's 14-year high and has been the key factor contributing to the pair's downslide to the lowest level since Oct. 31.

Today's release of the US pending home sales data is unlikely to hinder the greenback’s well-established up-trend and the pair sliding further from current levels remains a distinct possibility.

Technical levels to watch

On a sustained weakness below 1.2200 handle, leading to a subsequent break below 1.2185 horizontal support, is likely to accelerate the slide towards 1.2160 support area, en-route its next major support near 1.2100 handle.

Conversely, rebound from current support area, leading to a subsequent recovery back above 1.2240-45 resistance area, is likely to trigger a short-covering rally and lift the pair beyond 1.2300 handle towards testing its next important hurdle near 1.2325-30 region.