GBP/USD extends bearish slide below 1.2350 level

A fresh bout of greenback buying interest has emerged in the past hour, dragging the GBP/USD pair to its lowest level since Nov. 21.

Currently trading around 1.2355 region, 20-pips off session at 1.2334 level, the pair built on Monday's rejection slide from 1.2500 psychological mark amid resurgent greenback strength. In fact, the overall US Dollar Index is now darting back towards the 14-year high level touched last week, in the aftermath of hawkish FOMC forecast for 2017. 

The pair even failed to benefit from today’s upbeat release of the UK CBI realized sales, index based on surveyed retailers and wholesalers, and extended its bearish slide for fifth trading session in the previous six. 

However, comments from BoE's Ian McCafferty, that UK CPI will remain above target beyond 2019 and the central bank has limited tolerance of CPI overshoot, provides some respite and restricted the downslide for time being. 

From technical perspective, the pair last week decisively broke below a short-term ascending trend-channel and a follow through selling pressure below 50-day SMA has reaffirmed the break-down. Hence, from current levels the pair seems to extend its downward trajectory in the near-term. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "Technically, the 4 hours chart for the pair support some further intraday slides towards the 1.2330 region, a major static support, as the price holds near its daily lows and below a sharply bearish 20 SMA, whilst technical indicators have resumed their declines within negative territory. A break below 1.2230 should see the slide accelerating over the upcoming sessions, with 1.2270 as the next relevant support."

"The pair needs to advance beyond 1.2420 to deny the short term negative outlook, and attempt to correct higher up to 1.2460."