GBP/USD bounces-off 1.2100 neighborhood, recoveries like to be short-lived

The GBP/USD pair has managed to defend 1.2100 handle and recovered around 40-pips from the vicinity of 1.2100 handle touched earlier. 

Currently trading around mid-1.2100s, the pair on Tuesday remained under selling pressure for the third consecutive session and tumbled to its lowest level since Oct. 25 in wake of fresh worries over a 'hard Brexit'. 

The selling pressure surrounding the British Pound, however, stalled amid some long-dollar unwinding as investors turned cautious ahead of the President-elect Donald Trump's first news conference on Wednesday. 

Meanwhile, expectations of steeper Fed rate-hike actions in 2017 continued to underpin demand for the greenback and might restrict any swift recovery for the major. 

Even from technical perspective, the pair has decisively broken below 1.2200 strong horizontal support and hence, a follow through selling pressure would turn it vulnerable to continue drifting lower in the near-term.

Technical levels to watch

Immediate support on the downside remains near 1.2100-1.2080 region, which if broken decisively would open room for a retest of early October flash crash swing lows support near 1.20 psychological mark. Meanwhile on the upside, any recovery attempt might now face immediate strong resistance near 1.2200 handle above which a fresh bout of short-covering has the potential to lift the pair towards 1.2280-85 resistance, en-route its next major hurdle near 1.2340-50 region.