GBP/USD attempting a fresh move towards reclaiming 1.2300 handle
The GBP/USD pair caught fresh bids near mid-1.2200s and is now making a fresh move towards reclaiming 1.2300 handle.
Long-dollar unwinding has been the key theme prevailing in the market after the US President-elect Donald Trump's first press conference on Wednesday, where Trump failed to provide precise details of his probable policy stance and faded reflation trade optimism surrounding the greenback.
A follow through US Dollar selling pressure helped the GBP/USD major to break through 1.2270 resistance area and surge beyond 1.2300 handle to a fresh weekly high. The pair, however, quickly retraced nearly 70-pips from session peak, before regaining some traction ahead of the US opening. The pair was last seen trading around 1.2280-75 region.
A relatively lighter US economic docket, featuring the only release of weekly jobless claims, is unlikely to provide any impetus during early NA session. However, comments from various Fed members, including the Fed Chair Janet Yellen, although are not expected to any fresh guidance on the central bank's monetary policy stance, but would be looked upon for some immediate respite for the US Dollar bulls.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet notes, "From a technical point of view, the short term upward momentum seems to be fading according to the 4 hours chart, as indicators are losing upward strength within positive territory, while the 20 SMA remains flat, although below the current level. In the same chart, the price is below a still bearish 200 EMA that has contained rallies since mid December, now acting as a strong dynamic resistance at 1.2360."
She further writes, "Above the daily high, level that can be surpassed on disappointing US data, the rally can then extend towards the mentioned resistance, while beyond it, 1.2410 is next. Below 1.2240 on the other hand, the risk turns towards the downside, with 1.2200 and 1.2165 as the next intraday supports and probable bearish targets"