GBP/USD extends sharp recovery move from 1.24 handle, US GDP and Fedspeak in focus

Having posted a session low at 1.2400 neighborhood, the GBP/USD pair staged a goodish recovery and refreshed session tops near 1.2480 region despite of persistent greenback buying interest.

In absence of any fresh fundamental drivers, in-terms of major market moving economic releases / events, the sharp recovery bounce during mid-European session could be attributed to short-covering after the pair, for the second consecutive day, managed to recover back above 100-day SMA. 

Further upside, however, remains capped in wake of broad based US Dollar strength and it remains to be seen if the pair is able to build on to this recovery move as investors keenly await President of the European Council, Donald Tusk's response to the UK PM Theresa May's formal communication to kick-off the Brexit proceedings.

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In the meantime, the final revision of US Q4 GDP growth figures, due in a short while from now, and speeches from various FOMC members, later during the day, would now be looked upon for fresh impetus. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the 4 hours chart presents a neutral-to-bearish stance, with the price stuck around the 38.2% retracement of the January rally, and below a bearish 20 SMA, this last around 1.2490, whilst technical indicators head nowhere within negative territory. The pair has an immediate support at 1.2400, the daily low, followed by 1.2370. Below this last the bearish potential will increase with scope then to fall down to 1.2330. Above 1.2450, the pair could extend its gains up to the mentioned 1.2490, but further gains seem unlikely unless US data strongly disappoints."