The GBP/USD pair witnessed a tepid recovery bounce on Thursday and spiked to 1.2380 region during early European session, but remained confined within a broader trading range.
The pair quickly faded the spike and retraced sharply to currently trade around 1.2350 region, testing session low. The US Dollar extended its retracement from 14-year highs and was seen assisting the pair's recovery on Thursday amid thin market liquidity conditions.
With an empty UK economic docket, investors seemed inclined to lock-in some profits and unwound some of their bearish positions ahead of important US macro data, including the final GDP print for third-quarter of 2016, durable goods order for November, personal income / spending data along with the Fed's preferred inflation gauge - core PCE price index, due later during NA session.
In the meantime, the pair might continue with its dull trading action amid thin market liquidity conditions ahead of year-end holiday season.
Technical levels to watch
On the upside, 1.2400 handle remains immediate resistance above which the pair seems to immediately dart towards 50-day SMA resistance near 1.2420-25 region. A follow through buying interest above 50-day SMA should trigger a short-covering rally back towards 1.2500 psychological mark.
On the flip side, weakness below session low support near 1.2345 region might continue to take support around 1.2315-10 region, which broken decisively could accelerate the slide towards 1.2240-35 intermediate support en-route 1.2200 round figure mark.
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