GBP/USD surrenders early recovery gains, back below 1.30 mark

The GBP/USD pair faded early European session bullish spike and retreated around 40-pips from daily tops near the 1.3030 region.

The pair struggled to build on early recovery move and ran through some fresh offers at higher levels. Reemergence of selling pressure at higher levels clearly seems to suggest that the sentiment around the British Pound might have turned negative following last week's perceived dovish BOE monetary policy decision and persistent Brexit uncertainty. 

   •  UK: Near-term turbulence for sterling – ING

The pair drifted back below the key 1.30 psychological mark despite a subdued greenback demand. In fact, the key US Dollar Index failed to build on overnight up-move led by an upbeat report on job openings, which to some extent seems to have been negated by escalating geopolitical tensions stemming from the Korean Peninsula. 

   •  US: Getting a grip? - ING

Even from a technical perspective, yesterday's break below the 1.30 handle reaffirmed a near-term bearish breakdown. Hence, a follow through weakness, below 50-day SMA support near the 1.2930 region, now seems a distinct possibility.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the pair hovers around 1.3000, with a bearish 20 SMA rejecting advances and the price unable to settle above is 200 EMA in the 4 hours chart, whilst technical indicators in the same time frame turned flat within negative territory after correcting oversold conditions, indicating limited buying interest around the Pound. Beyond 1.3030, the recovery can extend up to 1.3060, although investors will probably prefer selling around this last. To the downside, 1.2965 is the immediate support, with a break below it favoring a downward extension towards 1.2920."