GBP/USD rebounds after hitting over two-month low

The GBP/USD pair came under renewed selling pressure during mid-European session on Monday and dropped to the lowest level since Oct. 28. 

The pair, however, has managed to bounce off around 30-35 pips from session low and is currently trading around 1.2150-60 band. The pair remained under intense selling pressure for the second consecutive day after comments from K Prime Minister Theresa May, in an interview with Sky News, reinforced concerns of 'hard Brexit". 

The pair did attempt a tepid recovery back towards 1.2200 handle following the release of better-than-expected UK Halifax House Price Index (HPI). The recovery, however, turned short lived amid resurgent US Dollar buying interest also collaborated to the sharp slide to 11-week lows. 

Later during NY trading session, speeches from Fed’s Rosengren and Lockhart might influence investors’ expectations over the US central bank's interest rates outlook for 2017 and might provide fresh impetus for the major. 

Technical levels to watch

A follow through selling pressure below multi-week lows support near 1.2125 region could accelerate the slide towards 1.2100-1.2080 region below which the pair is likely to turn vulnerable to head back towards multi-decade lows support near 1.2000 psychological mark, touched in early October. 

On the flip side, any recovery attempt might now confront resistance near 1.2200 handle, which is followed by resistance near 1.2225-30 region. A convincing move above 1.2225-30 resistance is likely to trigger a fresh bout of short-covering initially towards 1.2270 region, en-route 1.2300 handle.