GBP/USD off-lows, regains 1.2950

The GBP/USD pair failed to sustain at higher levels and dropped sharply in the European session, despite broad based US dollar weakness.

GBP/USD losing sight of 1.30 handle

Currently, GBP/USD trades almost unchanged at 1.2956, recovering from a brief dip to session lows struck at 1.2945 last hours.  Having peaked near 1.2980 region in the Asian trades, the cable is seen extending to the downside on the back of risk-averse market conditions, fuelled by mixed European equities and stalled rebound in the oil prices.

Moreover, traders prefer to remain on the side-lines heading into a data-heavy session ahead, which is likely to trigger huge volatility and provide fresh direction on the US dollar. However, upbeat UK construction output data for June, which came in at -0.9% versus -1.0 expected and -2.0% last, appear to rescue the GBP bulls amid a data-light UK docket.

GBP/USD Levels to consider                           

The pair has an immediate resistance at 1.2997 (5-DMA), above which 1.3050/66 (psychological levels/ daily R2) would be tested. On the flip side, support is seen at 1.2916 (daily S1) below that at 1.2876/72 (Jul 7 & 8 low).