GBP/USD slides below 1.2300 handle ahead of US releases

The GBP/USD pair surrendered part of yesterday's massive up-surge and has now slipped back below 1.2300 handle.

The pair shrugged-off upbeat UK employment details, showing an unexpected drop in claimant count change and better-than-expected rise in average earnings growth and extended its reversal from the 50-day SMA immediate hurdle. Market seems to have digested UK PM Theresa May's Brexit speech on Tuesday, where she confirmed to put forwards the final 'clean Brexit' plan for a vote in both Houses of Parliament. 

Meanwhile, resurgent US Dollar buying interest, following yesterday's sharp fall in wake of Trump's rhetoric on strong US Dollar is also collaborating to the pair retracement on Wednesday. Traders also seemed to trim their bearish bets against the US currency ahead of the latest US CPI print, which if adds on to strong December wage growth data would revive hopes of additional Fed rate-hike action and might kick-in a fresh leg of greenback bullish momentum. 

Today's US economic docket also features the release of industrial production and capacity utilization data. Also in focus would be speeches from various Fed officials, including the Fed Chair Janet Yellen, which might provide some fresh insights over the central bank's near-term monetary policy outlook and trigger a fresh bout of volatility in the market.

Technical levels to watch

A follow through selling pressure below 1.2285-80 immediate support is likely to drag the pair back towards 1.2200 handle, which if broken decisively might negate possibilities of any further near-term recovery. On the flip side, momentum back above 1.2300 handle might now confront strong resistance at 1.2350 region above which the pair is likely to make a fresh attempt towards reclaiming 1.2400 handle and head towards retesting 50-day SMA strong hurdle near 1.2415 region.