GBP/USD weaker around 1.3000 handle, awaits Fed minutes

The GBP/USD pair extended its retracement from a 5-day high level of 1.3070 touched during Asian session on Wednesday and is now on the verge of breaking back below 1.3000 psychological mark.

Despite of an initial uptick to 1.3060 immediately after the release of better-than-expected UK jobs report, the major has failed to attract follow-up buying interest and surpass session peak to build on yesterday's strong recovery gains. 

Heading into the key event risk, FOMC meeting minutes, a broad based greenback recovery following yesterday's steep fall has acted as a major headwind for the pair's recovery momentum. The minutes from FOMC latest monetary policy meeting would provide fresh impetus over the central bank's monetary policy outlook for 2016 and help investors gauge the possible timing of next Fed rate-hike action, which would eventually drive the US Dollar in the near-term.

From technical perspective, the pair is retracing from a previous strong support, turned immediate resistance near 1.3060-80 region, also nearing 20-day SMA. Hence, a follow through selling pressure below 1.3000 mark would categorize Tuesday's recovery as a dead-cat bounce and turn the pair vulnerable to resume with its downward trajectory.

Technical levels to watch

On a sustained weakness below 1.3000 handle, the pair seems to immediate drop to 1.2950 intermediate support before heading towards 1.2900 round figure mark support. On the flip side, 1.3060-80 zone (20-day SMA region) remains immediate strong resistance, which if conquered is likely to lift the pair through 1.3100 barrier towards testing 1.3150-60 horizontal resistance.