GBP/USD trims gains, still holding comfortably above 1.2300 handle

The GBP/USD pair trimmed some of its strong gains and retreated around 40-pips from session peak after upbeat US economic releases.

Currently hovering around 1.2320 region, the pair ran through some offers after data released from the US showed initial jobless claims unexpectedly sank by 15,000 to 234K in the week ended Jan. 13 and continued reflecting the underlying strength in the US labor market. Consensus estimates had forecast a rise in claims to 254K from previous week's 249K.

In other data, housing starts rose more-than-expected to a seasonally adjusted annual pace of 1.226 million in December, while Philly Fed manufacturing index jumped to the highest level since December 2014. 

Today's stronger-than-expected economic data added on to Wednesday's hawkish comments from the Fed Chair Janet Yellen and lifted the greenback, helping the key US Dollar Index to reverse early losses and build on Wednesday's recovery move. 

Later during NY session, the Fed Chair Janet Yellen's speech on "The Economic Outlook and the Conduct of Monetary Policy" would once again grab investors’ attention and provide fresh bullish impetus for the greenback's recovery move ahead of Trump’s inauguration on Friday. 

Technical levels to watch

A follow through selling pressure below 1.2300 handle would turn the pair vulnerable to head towards session low support near 1.2250 area, which if broken could accelerate the slide back towards 1.2200 round figure mark. On the upside, 1.2335-40 zone (session peak) remains immediate resistance, which if cleared decisively has the potential lift the pair back towards 1.2400 mark ahead of 50-day SMA important hurdle near 1.2415-20 band.