GBP/USD Forecast: Pound Sterling recovers above important tech level

GBP/USD has managed to shake off the bearish pressure.
The pair holds above key technical area where several SMAs converge.
Investors await US data releases, Wall Street’s opening bell.
GBP/USD has reversed its direction and advanced above 1.2450 early Wednesday following Tuesday’s decline. The renewed US Dollar weakness helps the pair gather recovery momentum mid-week and the technical outlook suggests that there is more room on the upside.

The cautious market stance allowed the US Dollar (USD) regain its traction on Tuesday and the US Dollar Index (DXY) gained 0.5%, erasing all of Monday’s losses. Early Wednesday, however, the DXY retreated below 101.50 and already retraced the majority of its latest recovery.
In the absence of high-impact data releases, the positive shift witnessed in risk mood on the back of upbeat first quarter earnings figures from US tech-giants, such as Microsoft and Google, seems to be weighing on the USD. Nasdaq Futures are up more than 1% on the day, S&P Futures gain 0.3% and the Dow Futures stay flat.

Since the beginning of the week, risk mood has been driving the USD’s valuation and a positive opening in Wall Street could allow GBP/USD to continue to stretch higher and vice versa.

Later in the day, the US Census Bureau will publish Durable Goods Orders for March. This data by itself is unlikely to trigger a significant market reaction, especially ahead of Thursday’s highly-anticipated Gross Domestic Product (GDP) report for the first quarter.

GBP/USD Technical Analysis
The 20-period, 50-period and 100-period Simple Moving Averages (SMA) on the four-hour chart align in between 1.2420 and 1.2430. As long as this area continues to act as support, buyers are likely to remain interested. On the upside, 1.2500 (psychological level, static level) aligns as first resistance before the pair could target 1.2550 (end-point of the uptrend).

On the downside, 1.2400 (psychological level, static level) and 1.2350 (200-period SMA) form next support levels if 1.2420/30 fails.