GBP/USD plunges to 1.3100 neighborhood after US housing data

The GBP/USD pair remained well offered and dropped to hit fresh session low, close to 1.3100 handle, after the release of slightly better-than-expected US housing data. 

Currently trading at 1.3130, down around 0.9%, the pair failed to benefit from an up-tick in UK CPI print for June. Prospects of further monetary easing by BOE, at its meeting in August, has kept any swift recovery for the British Pound under check and hence and has weighed on the GBP/USD pair. 

Meanwhile, a sudden pick-up in demand for the US Dollar across the board also contributed the GBP/USD pair's sharp fall on Tuesday. Adding to the bullish sentiment surrounding the greenback, slightly better-than-expected US housing starts data failed to provide any respite for the British Pound. 

According to the data by the Commerce Department, US housing starts rose 4.8% in June to a seasonally adjusted annual rate of 1.189 million. Meanwhile, building permits rose 1.5% to 1.153 million, which was also better-than a downwardly revised May reading of 1.136 million.

Technical levels to watch

From current levels, on a sustained break below 1.3100 immediate support is likely to extend the pair's bearish momentum back towards 1.3000 psychological mark, before the pair drops to its next major support near 1.2900 region.

On the flip side, any attempts of recovery might now confront immediate resistance near 1.3200 handle, above which the pair seems more likely to gain traction that could assist it to recover some lost ground. Above 1.3200 resistance, the pair seems all set to extend the recovery momentum towards session high resistance near 1.3250 level, which if cleared seems to boost the pair back above 1.3300 handle towards testing its next major resistance near 1.3335-40 region.