GBP/USD challenges 100-DMA important support heading into NFP

The GBP/USD pair continued to lose ground for the second consecutive session and has now dropped to fresh session low, testing 100-day SMA important support near 1.2480-75 band.

The pair ran through fresh offers on Friday following the disappointing release of UK services PMI that showed the gauge measuring activity in the UK services sector fell to 54.5 in January, down from previous month's 56.2 and worse than 55.8 estimated. 

Dismal UK services sector data added on to BoE's warning of "twists and turns" on the road out of the European Union and attracted some fresh selling pressure around the British Pound. 

Meanwhile, a broad based greenback recovery, with the key US Dollar Index retaking 100.00 psychological mark in pre-NFP repositioning trade, also collaborated to the pair's slide to three-day lows.

Friday's key event risk remains the official jobs report from the US, which might provide some fresh clues over the possibilities and timing of next Fed rate-hike action, and eventually provide fresh impetus for the pair's near-term direction.

Technical levels to watch

A follow through selling pressure would turn the pair vulnerable to head back towards 50-day SMA support near 1.2430 region below which a fresh leg of weakness might continue to drag the pair even below 1.2400 round figure mark, towards its next support near 1.2330-25 region.

On the flip side, any recovery attempts back above 1.2500 handle might now confront resistance at 1.2535-40 region above which the pair is likely to witness a short-covering rally towards 1.2580 horizontal resistance, en-route 1.2600 round figure mark.