GBP/USD recovery gains momentum, hits fresh session peak

Recovery momentum around the GBP/USD pair has gathered pace in the past hour, helping the pair to erase daily losses and jumped to session tops near 1.2185 region.

A modest US Dollar pull-back, primarily led by profit-taking, seems to be only factor assisting the pair's recovery from 7-week lows, retested during European session on Thursday. 

Meanwhile, a higher-than-expected rise in the weekly jobless claims, coming-in at 243K for week ended March 3 vs 235 K expected and previous week’s 223K, also prompted some profit taking and collaborated to the pair’s recovery move.

However, the US treasury bond yields bullish consolidation of previous session's strong up-surge shoudl continue to underpin the greenabck and hence, any further recovery could turn out to be short-lived. The pair seems more likely to confront fresh supply at higher levels amid persistent Brexit worries, which has been acting as a key overhang on the British Pound since past couple of weeks. 

Investors would remain focused on Friday’s keenly watched NFP report ahead of next week’s FOMC meeting before committing to the greenback’s next leg of directional move. 

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com notes, "I think we trade higher....1.22 is the 38.2 short term fib and 1.2230 is the little med term 23.6 fib...so I think this is the area we will head for....If we lose 1.2115 I'm out longs but still wont go short....The only time I will be a seller is below 1.1930 or up at 1.2350.....even then it will be with an extremely tight stop....."