The GBP/USD pair ran through fresh offers following the release of US economic data and extended the slide further below 1.2400 handle.
Currently trading at fresh multi-day lows, around 1.2385 region, spot accelerated the downslide on upbeat US economic data that showed yearly inflation surged in January at the highest rate in four years. In fact, the headline inflation, as measured by CPI, climbed 2.5% over the 12-months ending in January and pushed the US Treasury bond yields higher across the board on growing expectations of additional Fed rate-hike action in the near-term.
In addition to this, better-than-expected monthly retail sales data and strong reading for the Empire State Manufacturing Index further collaborated to the prevalent bullish sentiment around the key US Dollar Index and attracted fresh selling pressure around the major, which was already weighed down by weaker average earnings growth data from the UK.
Next on tap would be industrial production and capacity utilization data, followed by the Fed Chair Janet Yellen's second day of testimony before the House Financial Services Committee.
Technical levels to watch
The ongoing bullish momentum seems strong enough to continue dragging the pair towards 1.2350-45 support area below which the pair would turn vulnerable to break below 1.2300 handle and head towards testing its next support near 1.2260-55 horizontal zone.
On the flip side, recovery back above 1.2400 handle might now confront immediate resistance at 50-day SMA near 1.2420 region above which a fresh bout of short-covering is likely to lift the pair back towards 1.2500 psychological mark.