GBP/USD flirting with lows near mid-1.2400s

The GBP/USD pair failed to build on previous session's bullish momentum further beyond the 1.25 psychological mark hurdle and dropped to refresh daily lows near mid-1.2400s.

Dovish comment from BOE's Vlieghe that faster inflation alone doesn't mean BOE rate hike triggered the initial leg of reversal move. This coupled with modest US Dollar up-tick, led by some recovery in the US treasury bond yields further collaborated to the offered tone surrounding the major. 

The greenback, however, lacked any follow through buying interest amid cautious environment ahead of the crucial meeting between the US President Donald Trump and his Chinese counterpart Xi Jinping, that seems to help limit further downslide, at least for the time being. 

Next on tap would be the release of weekly jobless claims data from the US, which might provide some opportunities for short-term traders ahead of Friday's important releases from UK and the US.

Technical levels to watch

On a sustained weakness below 1.2450 level the pair is likely to head back towards 1.2420 important 100-day SMA support, below which the downward trajectory could get extended towards 1.2360 support before eventually dropping to its next major support near the 1.2300 handle.

On the flip side, 1.2485 level now becomes immediate resistance, which is closely followed by the 1.25 strong hurdle. A decisive break through the said handle is likely to trigger a short-covering rally towards 1.2550-55 horizontal resistance, en-route March monthly highs resistance near 1.2615 level.