GBP/USD reverses UK data-led tepid recovery gains, NFP ahead

The GBP/USD pair reversed UK data-led minor up-tick to session tops and has now moved back to neutral territory near 1.2160 region. 

Friday's data released from the UK showed industrial production contracted 0.4% m-o-m, while manufacturing production also contracted by 0.9% inter-month. The in-line with estimates industrial production data got negated by larger than expected contraction in manufacturing production. Meanwhile, the UK trade balance data showed deficit narrowing to £10.83 billion during January, from previous month's £10.951 billion and £11.050 billion deficit expected. 

A beat on the trade deficit data, coupled with a modest US Dollar retracement, provided a minor boost to the major during mid-European session. The tepid recovery move, however, turned out to be short-lived as investors remained cautious ahead of the key monthly jobs report from the US.

The official NFP data is expected to print a solid headline number, with consensus estimates pointing to an addition of 190K new jobs in February and unemployment rate ticking lower to 4.7%. 

Technical levels to watch

Bears would be eyeing for a break below 7-week lows support near 1.2135 area, below which the pair is likely to accelerate the slide towards 1.2100 handle before aiming towards its next major support near the key 1.20 psychological mark, with some intermediate support near 1.2045-40 zone.

On the up side, any recovery attempts might continue to face strong hurdle near 1.2200 round figure mark, which if cleared has the potential to lift the pair back towards 1.2255-60 intermediate resistance ahead of an important barrier the 1.2300 handle.