GBP/USD aiming to retest last week’s high of 1.3185

The GBP/USD pair is seen building on to Monday's recovery of over 100-pips from weekly gap down opening and has now moved within striking distance of last week's swing high level of 1.3185 to currently trade around 1.3160-65 band. 

On Monday, the pair shrugged-off news that UK might invoke Article 50 as early as in April and initiate the process of ending its membership with the European Union amid broad based greenback retracement ahead of the Fed chairwoman Yellen's address at the Jackson Hole symposium later this week. 

Markets, however, remained unconvinced that the Fed would go ahead and raise interest rates in 2016, thus capping any swift recovery for the US Dollar and helping the major to extend its near-term recovery trend. 

Traders now look forward to today's release of industrial order expectations data from the UK during European session, which will be followed by US new home sales data and Richmond Manufacturing Index later during NY trading session for short-term momentum play.

Technical levels to watch

From current levels, last week's swing high near 1.3185 level is likely to act as immediate resistance, above which the momentum is likely to lift the pair immediately towards 1.3220-30 resistance area. On a sustained strength above 1.3220-30 resistance, the pair seems all set to aim towards reclaiming 1.3300 handle and test monthly high resistance near 1.3350-70 area.

Meanwhile on the downside, weakness below 1.3100 round figure mark, and a subsequent break below 1.3060-50 intermediate support, might negate possibilities of any further recovery and force the pair to resume its bearish trajectory. Below 1.3060-50 support, the pair is likely to drift back towards 1.3000 psychological mark before heading towards 1.2950 intermediate support and eventually dropping to its next major support near 1.2900 round figure mark.