GBP/USD remains capped below 1.25 mark, ADP and Fed minutes hold the key

The GBP/USD pair held on to upbeat UK services PMI-led gains, albeit has failed to extend the movement and has retreated few pips from session high level of 1.2490. 

Currently trading around 1.2470-80 band, the pair remained capped below the key 1.25 psychological mark as investors now seem to await the release of ADP report on the US private sector employment. The ADP report is considered as a precursor to Friday's keenly watched official data, popularly known as NFP, and might trigger a fresh bout of volatility in the FX market. 

Moreover, traders seemed reluctant to carry big bets ahead of today's key event risk, the Fed minutes, which would provide fresh insight over the central bank's near-term monetary policy outlook and eventually help investors determine the greenback's near-term trajectory. 

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However, today's upbeat release of UK services PMI, rebounding from February's five month low level of 53.3 and coming in at 55.0 for March vs. 53.5 expected, might continue to underpin the British Pound and is likely to limit any immediate sharp retracement. 

It, however, remains to be seen if the pair is able to extend the recovery momentum from 100-day SMA important support, defended for the second consecutive day on Wednesday, or might continue facing strong supply on any move beyond the 1.25 handle.

Technical levels to watch

On a sustained break through the 1.25 important hurdle, the pair is likely to accelerate the up-move towards 1.2550-55 horizontal resistance before aiming towards March monthly highs resistance beyond the 1.2600 handle. On the flip side, bears would be eyeing for a decisive break below 1.2420 strong support, which if broken has the potential to drag the pair towards 1.2360 intermediate support ahead of its next major support near the 1.2300 handle.