GBP/USD capped by daily R1 on the 1st trading day of 2017

The GBP/USD pair stalled its gradual recovery mode from ahead of 1.23 handle, as the bulls ran into daily R1 resistance located at 1.2355, despite a downside bias seen in the greenback across the board, against the back drop of weaker treasury yields.

The cable now resumes its retreat from weekly tops reached at 1.2389 on Friday, the final trading day of 2016, after the US dollar was hit broadly by worse-than expected Chicago PMI gauge, which accelerated the profit-taking slide in the buck.

The major is expected to remain side-lined in a narrow range as most major global markets are closed today in observance of New Year holiday, which would result in thin trading and irregular volatility.

GBP/USD Levels to consider            

In terms of technical levels, upside barriers are lined up at 1.2355 (daily R1), 1.2389 (weekly high) and 1.2400 (round figure). While supports are seen at 1.2294 (10-DMA) and 1.2242 (Dec 30 low) and below that at 1.2200 (zero figure).