GBP/USD extends post-UK GDP slump, tumbles to near 2-month lows

   •  GBP weighed down by dismal UK GDP/fading rate-hike prospects.
   •  Resurgent USD demand adds to the already weaker sentiment. 
   •  US GDP print/Carney's speech eyed for some fresh impetus.

The GBP/USD pair extended its UK GDP-led slump and has now tumbled to near two-month lows, around mid-1.3700s. 

The British Pound was hammered down across the board after the UK reported a larger than expected slowdown in economic growth, marking its weakest reading since Q2 2012. Against the backdrop of last week's dovish surprise by the BOE Governor Mark Carney, today's dismal macro data further dampened May BOE rate hike prospects and prompted some aggressive GBP selling.

This coupled with a strong follow-through US Dollar buying interest, despite retracing US Treasury bond yields, collaborated to the pair's ongoing retracement slide from fresh post-Brexit highs, touched last Tuesday. Today's steep decline could also be attributed to some fresh technical selling, especially after a decisive break below the 1.3900 handle. 

Moving forward, the advance release of US Q1 GDP growth number will now be looked upon for some fresh impetus, which along with the BOE Governor Mark Carney's scheduled speech should influence the pair's momentum ahead of the next MPC meeting on May 10. 

Technical levels to watch

A follow-through weakness below mid-1.3700s has the potential to continue dragging the pair further towards March lows support near the 1.3710 region, which if broken should pave the way for additional near-term weakness.

On the upside, any meaningful recovery attempts back above the 1.3800 handle might now confront some fresh supply near the 1.3830-35 region, above which a bout of short-covering could lift the pair back towards the 1.3900 round figure mark.