GBP/USD struggling to clear 1.2300 barrier, US ISM in focus

The GBP/USD pair was seen struggling to build on upbeat UK manufacturing PMI-led bullish momentum, albeit has managed to hold with marginal gains for the day. 

Currently hovering around 1.2280 region, a surprisingly stronger-than-expected UK manufacturing PMI print for December assisted the pair's recovery from session low level near mid-1.2200s. In fact, Markit's UK manufacturing PMI for December jumped to 30-month highs and came-in at 56.1, as compared to 53.0 expected and 53.4 recorded in November. Today's upbeat manufacturing data eased some concerns of 'hard Brexit' and attracted some buying interest around the British Pound. 

The pair's recovery, however, lacked momentum and remained capped below session peak level of 1.2307 amid resurgent greenback strength across the board, with the overall US Dollar Index heading back towards 14-year highs touched in December. 

Later during NY session, the US ISM manufacturing PMI might provide some impetus for short-term traders. However, a slew of important macro releases during the course of current trading week, scheduled at the beginning of a new month, would help investors determine the next leg of directional move for the major. 

Technical levels to watch

A follow through momentum above 1.2300 handle is likely to confront resistance near 1.2335-40 region, which if cleared might trigger a short-covering rally towards 1.2400 handle, en-route 50-day SMA strong resistance near 1.2425 region. On the downside, renewed weakness below session low support near 1.2250-45 region is likely to accelerate the slide towards 1.2200 handle before dropping further towards its next major support near 1.2130-25 region.