GBP/USD clings to recovery gains, but struggles to break through 1.2920 barrier

The GBP/USD pair remained stuck in a narrow trading range through early NA session and was seen consolidating the latest UK election poll-led recovery gains back above the 1.2900 handle. 

Today's ICM UK election poll showed 11-point lead for Conservatives, at 45% as against Labour party's 34%, and drove the British Pound higher across the board. The poll result also helped traders to shrug off disappointing release of UK services PMI and greenback recovery move.

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In fact, the key US Dollar Index staged a goodish recovery from its lowest level since the US Presidential election in November but did little to stall the pair's recovery move from early Asian session lows near mid-1.2800s touched in reaction to the weekend terror attack in London. 

Meanwhile, market seems to have largely ignored an upward revision of Q1 US nonfarm productivity, now at 0.0% as compared to -0.6% originally estimated and 1.8% in Q4. The positive reading, to a greater extend, seems to have been negated by a larger-than-expected downward revision of unit labor costs, coming in to show q-o-q growth of 2.2% as against 2.5% expected and 3.0% reported previously. 

Despite of the up-move, the pair has failed to attract any follow through buying interest and has remained below the 1.2915-20 immediate strong hurdle as traders now look forward to the release of ISM nonmanufacturing PMI and factory orders data from the US for some fresh trading impetus. 

Technical levels to watch

A follow through buying interest beyond 1.2915-20 immediate resistance might trigger a short-covering rally towards 1.2975-80 resistance area before the pair eventually aims to surpass the key 1.30 psychological mark.

On the flip side, 1.2850 area remains immediate strong support to defend, which if broken is could accelerate the slide towards the 1.2800 handle en-route 50-day SMA support near 1.2770 region.