GBP/USD quickly retreats back below 1.42 handle, FOMC decision holds the key

   •  Stall overnight upsurge near 1.4215 on profit-taking.
   •  A broadly weaker USD continues to limit immediate downside.
   •  Traders start repositioning for the key Fed announcement.

The GBP/USD pair struggled to sustain early gains beyond the 1.4200 handle and quickly retreated around 30-40 pips from session tops. 

The latest leg of retracement slide from higher levels lacked any fundamental catalyst and could be solely attributed to some profit-taking, especially after the pair's sharp rally of over 200-pips in the past 24-hours. 

However, persistent US Dollar selling bias, further aggravated by a follow-through retracement in the US Treasury bond yields, helped limit any further losses, at least for the time being.

Today's UK economic docket lacks any major market-moving economic releases and hence, investors' focus would remain glued to the highly anticipated FOMC decision, due to be announced later during the NY trading session.

Ahead of the key event risk, the release of ADP report on the US private sector employment might provide some impetus and help traders grab some short-term opportunities.

Technical levels to watch

The 1.4200-1.4210 region might continue to act as immediate support, above which the pair is likely to accelerate the up-move towards 1.4260 hurdle en-route the 1.4300 handle. 

On the flip side, immediate support is pegged near mid-1.4100s, which if broken might prompt some additional long-unwinding trade and drag the pair back towards the 1.4100 handle.