GBP/USD Forecast: move beyond 1.29 handle

The US Dollar halted previous session's recovery move and held weaker during Asian session on Thursday as market seemed unimpressed by the US President Donald Trump's long-awaited tax reforms. Although the tax plan, announced on Wednesday, proposed to sharply lower business taxes but lacked necessary details. And with no fresh surprises, the announcement did little to lift the greenback. The GBP/USD pair reversed early dip to 1.2800 neighborhood and has now broken out of the 6-day old trading range resistance near 1.2850-60 region.

Moving ahead, the upcoming ECB monetary policy decision would influence the US Dollar and eventually provide some fresh impetus in the FX market, later during the day. On the macroeconomic front, the release of monthly durable goods orders, weekly jobless claims, goods trade balance and pending home sales data from the US would also be looked upon to grab some short-term trading opportunities.

Technically, a break through the recent consolidative trading range suggests additional gains back towards the 1.2900 handle. The said handle coincides with 61.8% Fibonacci retracement level of 1.3445-1.1980 downslide and hence, a follow through momentum beyond this strong hurdle now seems to pave way for continuation of the pair's near-term upward trajectory. Above 1.2900 handle, the pair is likely to accelerate the up-move towards 1.2960-70 intermediate resistance before eventually surpassing the key 1.30 psychological mark and head towards testing its next major hurdle near 1.3070-80 area.

However, should the pair fail to extend the break-out momentum and subsequently weaken below the 1.2800 handle, it is likely to turn vulnerable to break below 23.6% Fibonacci retracement level support near 1.2775-70 area and head towards weekly lows support near 1.2755-50 region. A follow through selling interest as the potential to continue dragging the pair further towards the 1.2700 handle support, marking 38.2% Fibonacci retracement level.

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