GBP/USD quickly recovers over 40-pips from sub-1.3100 level
• Quickly reverses a dip to sub-1.3100 handle.
• Broad-based USD weakness lending support.
• Focus remains on the US tax reform bill.
The GBP/USD pair quickly reversed a dip to sub-1.3100 level and has now rebounded around 40-pips from session lows.
Currently trading around the 1.3125-30 region, the pair once again managed to rebound from the 1.3085 region and was being supported by persistent US Dollar selling bias, led by increasing nervousness over the long-awaited US tax reforms plan.
Mounting uncertainty surrounding the Republican-led tax-cut legislation kept exerting pressure on the greenback and is turning out to be a sole driver of the pair's sharp recovery over the past couple of hours.
• USD consolidates as the US fiscal drama plays out - BBH
It, however, remains to be seen if the pair can build on the up-move or once again meets with some fresh supply at higher levels amid the latest UK political crisis and concerns over the lack of progress on Brexit negotiations.
• UK government remains in turmoil - BBH
Next on tap would be the weekly initial jobless claims data from the US. The US tax bill would remain in focus as investors brace for the release of the legislation text, expected to be revealed later today.
Technical levels to watch
Immediate resistance remains near the 1.3175-80 region, above which the pair is likely to surpass the 1.3200 handle and aim towards retesting the 1.3225-30 heavy supply zone.
On the flip side, the 1.3100-1.3085 region now seems to have emerged as immediate strong support, which if broken would turn the pair vulnerable to head towards testing the key 1.30 psychological mark.