GBP/USD off lows, still weaker below 1.29 handle

The selling pressure on the British Pound seems to have abated, with the GBP/USD pair bouncing off session lows touched in the last hour.

The pair managed to recover around 30-pips from mid-1.2800s despite better-than-expected US economic data and broad based US Dollar recovery.

The US data release on Thursday showed weekly jobless claims fell more than expected and the Philly Fed manufacturing index bettered expectations but did little to attract any fresh selling pressure around the major.

A slightly weaker-than-expected US industrial production data, coming in at 0.2% as against consensus estimates pointing to a reading of 0.3% seems to be the only factor helping the pair to recovery from closer to over 1-month lows touched in the previous session.

The up-move over the past couple of hours could also be attributed to some short-covering as the pair continued finding some dip buying interest below the 100-day SMA region. Hence, it would be a prudent strategy to wait for a decisive break below the mentioned support before repositioning for any additional near-term bearish slide. 

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Next in focus would be speeches from a couple of FOMC members - Dallas Fed President Robert Kaplan and Minneapolis Fed President Kashkari, which would be looked upon for some fresh impetus later during the NY trading session.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the risk remains towards the downside, as the 20 SMA contained the early advance, offering now a dynamic resistance around 1.2910. Technical indicators in the mentioned chart remain flat but well into-negative territory, also favoring the downside, particularly on a break below 1.2830, the immediate support. Beyond 1.2920, on the other hand, the upside will look more constructive, at least short term."