GBP/USD retreats back below 1.29 handle

Having posted a session high level of 1.2920, the GBP/USD pair ran through some fresh offers and retreated around 30-pips during early European session.

Bears knocked the pair back below the 1.2900 handle and the pair's latest leg of slide in the past hour or so could be attributed to broad based US Dollar recovery. A modest up-tick in the US treasury bond yields helped the key US Dollar Index to stage a minor recovery from multi-month lows touched in wake of growing expectations for a move dovish Fed monetary policy outlook for the rest of 2017.

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Meanwhile, the British Pound now seemed vulnerable on the back of recent UK election polls, indicating a tighter race at the upcoming UK general election on Thursday.

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Traders, however, are unlikely to place any aggressive bets ahead of testimony by former FBI Director James Comey and hence, could limit any immediate sharp downslide, at least for the time being. 

With an empty economic docket, it would be prudent to wait for the passage of key event risks before committing to the pair's next leg of directional move.

Technical levels to watch

A follow through retracement below 1.2870 region (yesterday's low) now seems to accelerate the slide towards 1.2845-40 intermediate support en-route the 1.2800 handle. On the flip side, sustained up-move beyond 1.2915-20 strong resistance now seems to lift the pair towards 1.2965-70 resistance ahead of the key 1.30 psychological mark.