GBP/USD downslide stalls near 100-DMA support

The GBP/USD pair extended its rejection move from 1.2600 handle and tumbled to three-day low, testing 100-day SMA strong support near 1.2510 region.

The pair, however, has managed to rebound from session low and is currently trading around 1.2535-40 region. The pair witnessed a weekly bullish gap opening following the US President Donald Trump's order on Friday, to ban travelers from seven Islamic countries, added to market worries over his protectionist stance. 

The pair, however, came under some renewed selling pressure amid broad based US Dollar recovery led by a fresh wave of up-move in the US treasury bond yields. Market participants also digested Friday's disappointing US Q4 GDP growth and now seemed to readjust their positions ahead of this week's key event risks - the Fed and BoE monetary policy decisions on Wednesday and Thursday respectively, followed by the release of keenly watched NFP data on Friday. 

With an empty UK data docket, focus would remain on the US economic release - Core PCE Price Index, Personal Income / Spending data and Pending Home Sales data, due later during NA session and might provide some impetus for short-term traders. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "The technical picture favors the downside, as the price holds below its 20 SMA, whilst the Momentum indicator hovers within bearish territory, whilst the RSI indicator heads sharply lower around 48, indicating that a slide below the mentioned support should lead to additional slides towards the 1.2460/70 level in the short term. Below this last, the slide can extend down to the 1.2420 region."

She further writes, "The pair has an immediate resistance at 1.2560 with a break above it targeting the mentioned daily high of 1.2600."