GBP/USD snaps 4-day losing streak, reclaims 1.3100 handle ahead of ADP report

The GBP/USD pair snapped four consecutive days of losing streak and is extending bounce from 1.3060-50 support area to currently trade just below mid-1.3100s.

A minor retracement in the greenback, as measured by the overall US Dollar Index, provided a boost to the major's rebound from immediate support area. In absence of any economic releases from the UK, no major fundamental trigger could be attributed to the ongoing recovery momentum. However, a bout of short-covering cannot be ruled out ahead of today's ADP report on US private sector employment.

ADP report is considered as a precursor to Friday's official jobs report (NFP), which will be watched closely in order to gauge possibilities of Fed action in September that has been the key factor driving the greenback higher across the board.

On Wednesday, traders will also confront the release of Chicago PMI and pending home sales data from the US, later during NA session. 

Technical levels to watch

From current levels, momentum above 1.3150 level seems to boost the pair immediately towards 50-day SMA resistnce near 1.3180-85 region, which if cleared has the potential to lift the pair beyond 1.3200 handle towards retesting a 3-week high level near 1.3275-80 zone touched last week.

Meanwhile on the downside, 1.3060-50 region remains immediate strong support to defend, which if broken is likely to accelerate the slide immediately towards 1.3000 psychological mark. A convincing break below 1.3000 mark would turn the pair vulnerable to extend its downslide towards retesting a very strong support near 1.2900 level in the near-term.