GBP/USD inches closer to 1.25 handle as USD recovers

The GBP/USD pair edged lower towards the 1.25 region as the macro data from the United States helped the greenback continue to recover yesterday's losses. At the moment, the pair is down 0.15% on the day at 1.2518, a tad above the session low of 1.2510.

The US Dollar Index was able to extend its recovery move after the weekly initial jobless claims came in at 234K, beating the expectations of 245K. Other data on Thursday revealed that producer prices fell for the first time since October 2016 but remained above the 2% mark on a yearly basis. Later in the session, the University of Michigan released its consumer sentiment index, which recorded an improvement to 98 in April from 96.9 in March. 

Yesterday the greenback suffered heavy losses after President Trump said that the strong dollar was hurting the United States. On Thursday, in the absence of any major fundamental developments, the US Dollar Index has been able to consistently correct yesterday's losses. At the moment, the index is up 0.36% at 100.42.

No sharp fluctuations are expected in the markets until the CPI and retail sales data from the United States are released tomorrow as the majority of Europe will be on holiday due to Easter Friday.

Technical outlook

The immediate hurdle for the pair aligns at 1.2175 (daily high) followed by 1.2615 (Mar. 27 high) and 1.2700 (psychological level). To the downside, supports could be seen at 1.2500 (psychological level), 1.2450 (Apr. 6 low) and 1.2390 (100-DMA).

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