GBP/USD extends recovery to 1.30 handle

The GBP/USD pair snapped four days of losing streak and staged a goodish recovery on the last trading day of the week, recovering part of previous session's losses to one-week lows.

The pair on Thursday tumbled to multi-day lows near 1.2935-30 region despite upbeat UK Retail Sales data. However, persistent greenback selling bias, with the key US Dollar Index weaker around 10-month lows helped the pair to recover around 60-65 pips from yesterday's swing lows. 

It, however, remains to be seen if the recovery is backed by any genuine buying or is solely driven by short-covering, amid fading prospects of any immediate BOE monetary policy action and uncertainty surrounding the Brexit negotiations.

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Meanwhile, today's recovery back to the key 1.30 psychological mark seems to suggest some buying interest near 20-day SMA support and hence, it would be prudent to wait for a follow through selling pressure before positioning for any additional near-term depreciating move.

Today's economic docket lacks any fresh fundamental triggers and hence, the USD price-dynamics would continue to play a key role in determining the pair's movement on the last trading day of the week.

Technical levels to watch

Sustained momentum beyond the 1.30 handle could get extended, but seems more likely to be capped at 1.3040-50 strong horizontal resistance. On the flip side, 20-day SMA  near 1.2945-40 region remains an immediate support to defend, which if broken could accelerate the fall even below the 1.2900 handle towards its next support around 1.2855 zone.