GBP/USD headed back to 100-DMA support

The GBP/USD pair stalled tepid recovery bounce near 1.2370 region and is now heading back to the lower end of daily trading range. 

Currently trading around 1.2435-30 band, spot ran through some fresh offers during mid-European session amid persistent greenback buying interest, with the key US Dollar Index meandering near session tops around 100.60 region. 

Today's UK economic release, showing construction activity slowed slightly in March, added to Monday's disappointing manufacturing PMI print and did little to stall the pair's reversal move from mid-1.2500s. 

The pair has now retreated over 125-pips in just two trading session and reversed the recovery gains recorded during the latter half of the previous week. Despite of today's slide for the second consecutive session, the pair is yet to decisively break below 100-day SMA support, held on closing basis even after UK's formal intimation to begin Brexit negotiations. Hence, it would be prudent to wait for a decisive break below the said important support before committing to any near-term bearish bias.

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Focus now shifts to the US economic docket, featuring the release of trade balance and factory orders data, which would be looked upon for some fresh trading impetus during early NA session.

Technical levels to watch

A decisive break below 100-day SMA support, would accelerate the slide towards 1.2360 support before the pair eventually heads towards testing its next major support near the 1.2300 handle. On the upside, sustained recovery above 1.2465-70 immediate resistance is likely to confront strong resistance near the key 1.25 psychological mark, above which a bout of short-covering could lift the pair back towards 1.2550-55 strong horizontal resistance en-route March monthly highs resistance near 1.2615 level.