GBP/USD treading water above 1.2450, Fedspeak ahead

Having bottomed near 1.2435 level, the GBP/USD pair regained traction but once again failed to sustain its momentum beyond the key 1.25 psychological mark.

Spot accelerated the recovery move from session lows but ran through some fresh offers after the US economic data showed the Core PCE Price Index rose 0.2% m-o-m in February, taking the increase over the past 12 months to 2.1%. The core PCE index is the Fed's preferred inflation gauge and has now moved above the central bank's 2% target for the first time since March 2012. The incoming data remained supportive for additional Fed rate-hike moves in the near-future and lifted the US treasury bond yields across the board, extending some support to the US Dollar. 

In other US macro data, personal income recorded a healthy 0.4% rise during February but got negated by the slowdown in spending, showing a scant 0.1% increase last month. 

   •  US: Consumer spending hardly increased in February

Mixed US economic data, coupled with in-line UK GDP print and better-than-expected UK current account deficit, seems to limit further downslide and has helped the pair to hold marginally above mid-1.2400s. 

Next on tap would be speeches by New York Fed President William Dudley and Minneapolis Fed President Neel Kashkari. On the economic data front, the Chicago PMI and Revised UoM Consumer Sentiment index are also due for release of Friday.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "the 1 hour chart shows that the price has settled above an anyway horizontal 20 SMA, whilst technical indicators head nowhere around their mid-lines. In the 4 hours chart, however, the pair maintains a bullish stance, holding above a bearish 20 SMA, but with technical indicators heading north within positive territory. 1.2430 represents the 38.2% retracement of the January rally, and the level to break to see the pair coming under selling pressure."