GBP/USD at two-week lows, testing 1.2675 resistance zone

• The Pound takes advantage of US Dollar weakness to hit fresh two-week highs at 1.2675.
• The higher-than-expected increase in US jobless claims has increased bearish pressure on the dollar.
• The GBP/USD pair is testing an important resistance zone at 1.2675.

The British pound is gaining bullish momentum on Thursday, driven by favorable market sentiment, which is weighing on the safe-haven US dollar.

Data from the US Department of Labor revealed that jobless claims increased by 222,000 in the final week of March 29, up from an upwardly revised 212,000 the previous week. The market had anticipated a softer rise of 214,000.

Fed taper hopes weigh on USD

These figures, along with the unexpected weakness in US services sector data released on Wednesday, have restored investors' confidence that the Fed could begin cutting rates in June. This has improved risk appetite, limiting the recovery in US Treasury yields and putting downward pressure on the US dollar.

Earlier this week, data from the United Kingdom showed that manufacturing activity grew for the first time in the last two years. This has improved the prospects for the country's economy, giving a further boost to the Pound sterling.

The technical picture remains bearish, with the pair approaching an important support zone at 1.2675-1.2695. Above here, the next target would be 1.275 and the March 21 high at 1.2800. Supports are 1.2570 and 1.2535.