GBP/USD challenging one-month lows after US data

The GBP/USD pair came under renewed selling pressure and has now dropped to fresh one-month low level of 1.2312 following the upward revision of US GDP growth.

The pair, however, has managed to bounce off low and is currently trading around 1.2320 region. Today's mixed US economic data showed GDP grew at a faster-than previously estimated rate of 3.5% (annualized) in Q3 2016, while durable goods orders contracted by 4.6% (-4.7% expected) during November. Meanwhile, weekly jobless claims also climbed more-than-expected and came-in at 275K versus 256K. 

Although the data provided little evidence of a strong economic growth in the last quarter of 2016 but provide an additional boost to the prevalent strong bullish sentiment surrounding the major. 

Next on tap would be the Fed's preferred inflation gauge - core PCE index, which again seems unlikely to force the pair to push through monthly lows as traders might be reluctant to add on to their bearish position ahead of important UK releases  on Friday - Current Account and final GDP print. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "Below the mentioned weekly low, the decline would likely extend down to the 1.2280 region, en route to 1.2250, a major static support. The pair needs to recover above 1.2410 to reverse this bearish tone and be able to correct higher, towards the 1.2450/60 price zone. Above this last,  the next strong resistance comes at 1.2500."