GBP/USD stick to strong gains near weekly high

After an initial struggle, the GBP/USD pair caught fresh bid during mid-European trading session and now seems to sustain its up-move above 1.2300 handle. 

The greenback extended its profit-taking slide across the board, dragging the overall US Dollar Index back towards two-week low, seems to be the only factor collaborating to the pair's strong move in the past couple of hours. This coupled with holiday-thinned trade further aggravated the move and lifted the pair to fresh weekly high, albeit has failed to assist the pair to decisively break through 1.2315-20 strong horizontal resistance. 

In absence of any fresh economic development, extremely illiquid market conditions, in wake of year-end holiday season, might continue to trigger some sharp and volatile moves. Moving ahead, Chicago PMI print for December would now be looked upon for some fresh impetus during early NA session. 

Technical levels to watch

A convincing move above 1.2315-20 resistance area is likely to trigger a fresh bout of short-covering and continue boosting the pair further towards its next major hurdle near 1.2400, en-route 50-day SMA resistance near 1.2420-25 region. On the downside, renewed weakness below 1.2300-1.2290 zone is likely to drag the pair back towards 1.2265-60 support ahead of an important support near 1.2220 region.