GBP/USD turns back lower, around 1.3525 as USD rebounds

The USD sell-off seems to have abated for the time being, with the GBP/USD pair quickly retreating around 40-pips from session tops.

With a sharp upsurge of over 80-pips from a one-week low level of 1.3482 and a subsequent retracement, it is turning out to be a volatile trading session for the major. 

The pair initially extended its overnight retracement and broke below the key 1.3500 psychological mark in reaction to today's mixed UK economic releases, especially a sharp deterioration in trade-deficit data

The pair quickly rebounded and surged to a new session high, above mid-1.3500s, in wake of broad-based USD weakness, triggered by a news report that Chinese officials have made a recommendation to slow down or halt purchases of US Treasuries.

As markets still await official confirmation of the news, a modest US Dollar rebound prompted some fresh selling at higher levels and dragged the pair back into negative territory. 

Meanwhile, traders seemed to have largely negated today's ahead of schedule and better-than-expected release of UK NIESR GDP estimate of 0.6% for the last quarter of 2016. 

From the US, today's second-tier economic data is unlikely to provide any meaningful impetus and hence, the USD price dynamics might continue to act acting as an exclusive driver of the pair's movement.

Technical levels to watch

A convincing break below the 1.3500 mark, leading to a subsequent weakness below 1.3480 level, would turn the pair vulnerable to accelerate the slide back towards the 1.3400 handle with some intermediate support near 1.3435 level.

On the upside, the 1.3550-60 region might continue to act as an immediate barrier, above which the pair is likely to make a fresh move back towards conquering the 1.3600 round figure mark.