Forexpros - The pound trimmed losses against the U.S. dollar on Wednesday, pulling back from a four-month low as market sentiment firmed up after the European Commission said the euro zone’s bailout fund could be used to recapitalize banks. GBP/USD pulled away from 1.5550, the pair’s lowest since January 25, to hit 1.5589 during European afternoon trade, still down 0.32% on the day. Cable was likely to find support at 1.5516, the low of January 23 and resistance at 1.5643, the session high. The pound found support after the European Commission said that stricken euro zone banks could be recapitalized directly through the region’s permanent bailout fund. In its report on euro zone economic strategy, the Commission also supported the idea of “joint debt issuance� or euro bonds, an idea which has met strong opposition from Germany, and said the euro zone should mover towards the idea of a banking union. But the pound remained vulnerable to further losses after an opinion poll in Greece showed anti-austerity party Syriza ahead, with 30% voter support. Meanwhile, the yield on Spanish 10-year bonds was hovering close to 6.7%, close to the critical 7% threshold that preceded bailouts in Greece, Ireland and Portugal. The pound was higher against the euro, with EUR/GBP slipping 0.12% to hit 0.7980. Later Wednesday, European Central Bank President Mario Draghi was to speak, while the U.S. was to release a report on pending home sales.

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