GBP/USD retraces from 1.3200 handle, still holding with strong gains

After rising to 1.3200 neighborhood on upbeat UK employment details, the GBP/USD pair has trimmed some of its strong gains and is currently trading around 1.3170-80 region.

Earlier on Wednesday, the pair dropped to 6-day low level but managed to rebound sharply as UK jobs data for June surpassed consensus estimates by printing an overall unemployment rate of 4.9%, down from 5.0% recorded in May. The number of people claiming jobless benefits was also well below 4.1 k expected and came-in at meager 400. 

Meanwhile, the average earnings also posted strong gains of 2.3%, which further improved the outlook for inflation in the near-future. 

Adding to the bullish sentiment surrounding the British Pound, the BOE agents report, which came out at the same time as the UK jobs data, revealed an upbeat assessment of the UK economy despite of last month's historic Brexit referendum.

With an empty US economic docket, the pair might continue to benefit from strong jobs report amid prevalent risk-on environment.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "Technically, the 4 hours chart shows that the price is a few pips below a bearish 20 SMA, whilst the technical indicators have recovered within negative territory, but are still below their mid-lines, not enough to confirm a steeper recovery."

"The mentioned 1.3220 is the immediate resistance, with some additional gains above it pointing to an extension up to 1.3260 first, followed later by 1.3320, the 23.6% retracement of the post-Brexit slump. Below 1.3130 on the other hand, the risk turns towards the downside, with the pair then poised to retest the mentioned daily low."