GBP/USD pare gains from 1.3100 neighborhood, drops to 1.3050

After an initial bullish spike close to 1.3100 region, the GBP/USD pair ran through fresh offers and dropped below 1.3050. 

Currently trading around 1.3060, the pair is seen building on to Tuesday's recovery from 4-week low level touched in the aftermath of last week's strong US jobs report and Tuesday's disappointing UK economic releases. 

Tuesday's release of US productivity data diminished prospects of an eventual Fed rate-hike action in 2016 and is seen weighing on the greenback across the board. 

The major rebounded from an intermediate support near 1.2960-50 and was solely led by a broad based selling pressure surrounding the US Dollar. The recovery momentum, however, now seems to confront resistance at 100-hourly SMA near 1.3090-1.3100 region. Hence, a strong follow through buying interest is needed to assist the pair in extending its recovery trend. 

Going forward, the pair would continue to take cues from sentiment surrounding the greenback ahead of the BoE’s Agent’s Summary of Business Conditions during European trading session and US JOTLS jobs data later during NA trading session. 

Technical levels to watch

On a sustained weakness below 1.3050, resistance turned support, the pair seems to head back towards 1.3000 psychological mark, which if broken would negate possibilities of any further recovery and would continue dragging the pair, even below 1.2960-50 intermediate support, towards testing its next major support near 1.2850 region.

On the flip side, a sustained move above 100-hourly SMA resistance near 1.3090-1.3100 region should assist the pair to extend its recovery trend immediately towards 1.3110-15 resistance area, above which the move could further get extended towards 200-hourly SMA important resistance near 1.3150-60 region.