GBP/USD unable to hold modest gains, 1.22 still in sight

Following a dip to 1.2213, GBP/USD regained traction during the NA session but lost its momentum before testing 1.23. After refreshing its daily high at 1.2280, the pair once again slipped below 1.2250.

USD under pressure ahead of Yellen

Greenback has come under renewed selling pressure following the PMI data. According to the latest report published by Markit, the growth of service sector in the United States dipped to a five-month low. Further details of the report showed that business optimism had mellowed back to its post-election level and Rates of expansion in activity, new work and employment ease from January peaks.

Later in the session, Chair Janet Yellen will be speaking in Chicago on the topic of Fed’s economic outlook. Several Federal Reserve officials in recent days have prompted that the case for another hike, as soon as March, was strengthening. Markets are pricing the probability of a rate hike at 77%, according to CME Group FedWatch Tool.  

GBP/USD technical levels

As of writing, the pair is down 0.17% at 1.2245 facing the first resistance at 1.2300 (Psychological level/Mar. 2 high), ahead of 1.2360 (Fib. 61.8% - Dec. – Jan. fall) and  1.2410 (50 DMA). On the downside, the first support is aligned at 1.2215 (daily low), followed by 1.2160 (Fib. 23.6%) and 1.2100 (psychological level), 1.0050 (20-DMA) and finally 1.000 (psychological level/Feb. 28 low).