GBP/USD surrenders a major part of early gains to 1.3200 neighborhood

   •  Disappointing UK services PMI triggers the initial leg of a pull-back from multi-day tops.
   •  Reports that the EU will not accept another short extension prompts some more selling.
   •  Downside remains limited amid weaker USD/dismal US ADP report and ISM PMI.
 
The GBP/USD pair surrendered a major part of its early gains to multi-day tops, albeit has managed to hold in the positive territory through the early North-American session.

The pair initially built on the previous session goodish bounce from the vicinity of the key 1.30 psychological mark and remained supported by the overnight Brexit developments - the introduction of a motion to vote on a Bill to prevent a no-deal Brexit and extend Article 50, and the UK PM Theresa May's offer for cross-party talks. 

The positive momentum fizzled out, rather met with some supply just ahead of the 1.3200 round figure mark following the disappointing release of UK services PMI, which unexpectedly dropped into contraction territory and plunged to 48.9 points in March - levels last seen in July 2016.

Meanwhile, the latest leg of a sudden drop witnessed over the past hour or so lacked any obvious catalyst but followed news report that EU leaders are unlikely to allow a short Article 50 extension unless British MPs don't approve the Withdrawal Agreement by April 11. 

The downside, however, seemed cushioned, at least for the time being, amid the prevalent US Dollar selling bias, which failed to gain any respite from the latest disappointment from ADP report on private sector employment and ISM non-manufacturing PMI print for the month of March.

It would now be interesting to see if the pair is able to regain positive traction at lower levels or the current pull-back marks the end of this week's positive move as investors still look for some clarity/fresh updates on the impending Brexit issues.

Technical levels to watch

Immediate support is pegged near the 1.3120 region (session lows) and is closely followed by the 1.3100 round figure mark, below which the pair is likely to accelerate the slide further towards the 1.3035-30 horizontal support. On the flip side, the 1.3200 handle now seems to have emerged as an immediate resistance, which if cleared decisively has the potential to lift the pair towards challenging the 1.3260-65 supply zone.