GBP/USD trying to defend 1.2400 handle amid renewed USD strength

After failing to sustain early move beyond 50-day SMA and 1.2500 handle, the GBP/USD pair came under renewed selling pressure and has now dipped below 1.2400 handle, erasing tepid recovery gains posted in the previous three sessions

Currently trading marginally below the said handle, the pair snapped three consecutive days of tepid recovery gains and reversed over 130-pips from the highest level since Nov. 11 touched during early Asian session on Monday. 

Spot prices lost further ground in the past hour amid resurgent greenback buying interest on growing expectations of faster-than-expected Fed rate-hike action, beyond December meeting. In fact, the overall US Dollar Index has now recovered early lost ground and moved back into positive territory, inching closer to multi-year highs touched last week. 

In absence of any market-moving releases from the US, USD price dynamics would remain the sole driver ahead of this week's key event risks - revised US Q3 GDP print on Tuesday, BOE Financial Stability report and bank stress results on Wednesday and Friday's US monthly jobs report (popularly known as NFP). 

Technical levels to watch

From current levels, a follow through selling pressure is likely to drag the pair immediately towards 1.2360 (Nov. 23 low) ahead of its next major support near 1.2310-1.2300 region (Nov. 18 & 21 lows). On the upside, any recovery attempts back above 1.2400 handle might now confront strong resistance near 1.2450-60 region above which the pair is likely to make a fresh attempt towards reclaiming 1.2500 psychological mark.

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