GBP/USD back above 1.2300 handle ahead of US macro releases

After a volatile move during early European session, the GBP/USD pair finally seems to have stabilized and has now moved back above 1.2300 handle ahead of US economic releases. 

Early on Thursday, the pair extended overnight recovery gains and jumped to a session peak level of 1.2362 amid an offiered softer tone surrounding the US Dollar, in wake of a slight disappointment from Fed minutes. However, recovery in the US treasury bond yields helped the greenback to recover majority of its lost ground and dragged the pair sharply lower to daily low at 1.2270 level. 

Meanwhile, better-than-expected UK services PMI added on to recent slew of upbeat PMI readings (manufacturing and construction) and provided a much needed respite for the bulls, lifting the pair back above 1.2300 handle. The pair is now trading around 1.2315-20 region, nearly unchanged from yesterday's closing, as traders await for the release of key US macro releases. 

Today's US economic docket features the release of ADP report on private sector employment, due in a short while from now, and ISM non-manufacturing PMI, slated for release during NY trading session, which would be looked upon for fresh impetus ahead of Friday's official NFP data.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "The short term picture remains neutral, with the pair hovering around the 23.6% retracement of the latest daily slide at 1.2325, also a major static resistance that contained advanced for all of the past October. The price is holding above an anyway horizontal 20 SMA, whilst technical indicators lack directional strength but hold within positive territory."

"Should the recovery extend beyond the mentioned resistance, the pair can retest its daily high, en route to 1.2400, moreover if upcoming US data misses expectations. A break below the daily low, on the other hand, may result in a slide towards the 1.2200/20 region."