GBP/USD plummets to 1.3900 and rebounds sharply, a fat finger trade?

The GBP/USD pair extended its retracement slide from the 1.40 neighborhood and tumbled to fresh session lows in the last hour, albeit quickly recovered few pips thereafter. 

It is turning out to be yet another volatile session for the major, which initially spiked to an intraday high level of 1.3995 but then retreated sharply closer to the 1.3900 handle on the back of incoming Brexit headlines. 

The latest leg of fall led by a news report that Brexit opponents are preparing a major campaign, which, according to a leading pro-EU campaigner, has close to a 50:50 chance of stopping Brexit by blocking Prime Minister Theresa May’s divorce deal. 

The pair, however, quickly rebounded over 60-pips from lows and the price action now seems to suggest that a sudden plunge was potentially due to a “fat finger” trade. 

Meanwhile, a goodish pickup in the US Dollar demand, despite falling US Treasury bond yields, might continue capping any further gains, at least for the time being and amid empty US economic docket. 

Technical levels to watch

Bulls would be eyeing for a clear breakthrough the 1.40 handle, above which the pair seems all set to dart towards testing the 1.4075-80 supply zone en-route the 1.4100 round figure mark. On the flip side, immediate support is now pegged near mid-1.3900s, below which the pair is likely to head back towards resting the 1.3900 handle.