GBP/USD rebounds to test 1.2300 amid slowing volumes

The pound stalled the steady decline from the Asian spike to 1.2309, as the bulls regained poise and allowed a bounce in GBP/USD back towards 1.23 handle.

The renewed strength in cable is largely attributed to some fresh selling in the US dollar, after the USD bulls failed to sustain the recovery from two-week troughs.

However, further upside looks restricted amid a cautious tone prevalent in the market ahead of the New Year holiday-break, as thin liquidity and irregular volatility could trigger erratic moves, similar to the ones witnessed in Asia today.

GBP/USD Levels to consider            

In terms of technical levels, upside barriers are lined up at 1.2309 (weekly high), 1.2350 (psychological levels) and 1.2379 (Dec 22 high). While supports are seen at 1.2268 (5-DMA) and 1.2200 (round figure) and below that at 1.2141 (Oct 31 low).