The greenback extended overnight reversal move, helping the GBP/USD major to move within striking distance of reclaiming 1.2500 psychological mark.
Currently trading around 1.2490-95 band, the pair has now recovered over 100-pips from yesterday's sub-1.2400 level and has been primarily driven by a follow through greenback retracement. The Fed Chair Janet Yellen's slightly cautious tone, during the semiannual before the House Financial Services Committee, failed to extend upbeat US economic data-led bullish sentiment surrounding the greenback and prompted investors to trim their bullish USD bets. In fact, the key US Dollar Index on Wednesday reversed early up-move to monthly highs and has now broken below 101.00 handle.
With Wednesday's reversal and subsequent recovery on Thursday, markets now seem to have digested yesterday's disappointing UK CPI print and the US Dollar price-dynamics remains an exclusive driver of the pair's movement on Thursday.
In absence of any relevant data from the UK, market participants will focus on the US economic docket featuring the release of usual weekly jobless claims, building permits, housing starts and Philly Fed manufacturing index, due later during NA session.
Technical levels to watch
Momentum above 1.2500 immediate resistance is likely to confront resistance near 1.2525-30 horizontal zone, which if cleared is likely to accelerate the up-move back towards 1.2575-80 resistance ahead of 1.2600 round figure mark.
On the downside, 1.2465 level now becomes immediate support to defend below which the pair could drop 50-day SMA support near 1.2420 region before eventually breaking back below 1.2400 handle and aim towards testing Feb. monthly lows support near 1.2350-45 region.