GBP/USD struggling near multi-week lows

The GBP/USD pair extended its downslide and traded in negative territory for the fourth consecutive session, closer to Wednesday's 7-week lows.

Currently hovering around mid-1.2100s, spot extended the rejection move from the 1.2300 handle touched on Monday amid persistent US Dollar demand on the back of growing bets for an imminent March Fed rate-hike move. Surging US treasury bond yields, further supported by Wednesday’s stellar ADP report, have been helping the greenback to extend recent up-trend.

Meanwhile, renewed Brexit worries continues to weigh on the British Pound and collaborating to the pair's downward trajectory since late Feb. Recall that the UK PM Theresa May suffered another setback after the House of Lords voted to amend the Brexit bill on Tuesday. Even an upgrade of the UK economic projections, at the budget statement on Wednesday, did little to provide any immediate respite for the GBP bulls. 

In absence of any major market moving releases from the UK economic docket, focus would be on the ECB monetary policy decision, which might trigger a bout of volatility in the FX markets and provide some fresh impetus for the major. 

Technical levels to watch

Sustained weakness below mid-1.2100s, leading to a subsequent break below 1.2125 level, is likely to accelerate the downslide towards 1.2085-80 intermediate support before the pair eventually drops to retest the key 1.2000 psychological mark support.

On the flip side, any recovery above 1.2175 level might now confront strong hurdle near the 1.2200 round figure mark, above which a bout of short-covering is likely to lift the pair towards 1.2255-60 horizontal resistance.