The GBP/USD pair's recovery momentum faced rejection just below 1.2200 handle and the pair subsequently dropped to a fresh session low level of 1.2135 in the past hour of trading.
Currently hovering around mid-1.2100s, the pair ran through fresh offers at higher level amid expectations of a 'hard Brexit', which has been the key factor weighing on the British Pound in the past couple of weeks.
Moreover, the prevalent risk-off mood is driving investors towards the perceived safety of the US Dollar, which remains underpinned on increasing odds of further Fed rate-hike action by the end of this year.
Next on tap would be US economic docket, which features the release of Empire State Manufacturing Index, Capacity Utilization Rate and Industrial Production data. Later during US trading session Federal Reserve Governor Stanley Fischer is scheduled to deliver a speech on "Low Interest Rates" and will be scrutinized to reaffirm market expectations of an eventual Fed rate-hike action and should provide fresh impetus for the pair.
Valeria Bednarik, Chief Analyst at FXStreet, notes, "the pair trades sub-1.2200, and the risk remains towards the downside according to the 4 hours chart given that the price is being capped by a bearish 20 SMA in the mentioned time frame, while the Momentum indicator stands path around its 100 level and the RSI indicator is turning modestly lower around 38. The immediate support is 1.2130, with a break below it exposing the 1.2080 price zone, October 11th daily low."
"If the price manages to settle above 1.2200, on the other hand, the pair can recover up to 1.2270 before resuming its decline."