GBP/USD retrace from highs, trades with moderate gains at 1.2930

The GBP/USD pair's initial up-tick to 1.2970 got sold into and the pair has now trimmed its earlier gains to currently trade near 1.2930 with only minor gains from Thursday's closing level.

On Thursday, the major initially jumped above 1.3000 handle and rose to 1.3050 after UK data showed lower-than-expected fall in manufacturing and industrial output. The pair, however, reversed sharply to erase all of its early gains and dropped below 1.2900 handle as tumbling crude oil prices added fuel to the ongoing uncertainty surrounding the economic implication of the historic Brexit vote and drove investors back towards the perceived safety of the US Dollar. 

Also on Friday, the pair erased its early rebound to 1.2970 as investors now gear-up for the release of one of the most influential market moving economic data from the US, monthly employment data, which is know to trigger a sudden spurt in volatility across global financial markets. In the meantime, traders will take cues from UK goods trade balance data for the month of May for immediate momentum play.

Technical levels to watch

On the downside, 1.2900-1.2880 remains immediate support to defend, which if broken has the potential to drag the pair back towards weekly lows support near 1.2800 handle. Meanwhile on the upside, should the pair manages to build on to its momentum above 1.2960-70 immediate resistance, it seems to head back towards 1.3000 handle and eventually extend its bullish traction further towards its next major resistance near 1.3080-85 zone.