GBP/USD recovers further beyond 1.40 mark in pre-NFP repositioning trade

   •  A modest USD retracement prompts some short-covering move.
   •  A strong follow-through buying needed to confirm additional gains.
   •  Focus remains on the key NFP report/Powell & Carney speech.

The GBP/USD pair reversed an early European session dip to 1.3983 and has now recovered nearly 40-pips from daily lows.

Despite a goodish rebound in the US Treasury bond yields, the US Dollar failed to preserve its early gains and was seen as one of the key factors behind the pair's goodish recovery bounce.

In absence of any obvious catalyst, some repositioning trade, ahead of the official US monthly jobs report, might have prompted traders to lighten their bearish bets, which further collaborated to the pair's steady climb to the 1.4020-25 region.

Apart from the keenly watched NFP data, scheduled speeches by the BoE Governor Mark Carney and the Fed Chair Jerome Powell might infuse some volatility on the last trading day of the week. 

Looking at the broader picture, the pair's repeated rejection at the 1.4100 handle and a subsequent break below a 1-week old trading range clearly seem to suggest that the near-term bearish trajectory might still be far from over.

Hence, it remains to be seen if the pair is able to build on the recovery momentum or the up-move is utilized as an opportunity to initiate fresh short positions. 

Technical levels to watch

Immediate resistance is pegged near 1.4040 level, above which the pair is likely to head back towards testing 1.4080 supply zone before eventually making a fresh attempt towards conquering the 1.4100 handle.

On the flip side, sustained weakness back below the key 1.40 psychological mark might turn the pair vulnerable to extend its near-term bearish trajectory back towards 1.3965 intermediate support en-route the 1.3900 handle.