GBP/USD climbs further beyond mid-1.2900s, closer to weekly tops

• Increasing odds of a majority for Conservatives continue to underpin the GBP.
• A subdued USD demand, despite positive trade headlines, remained supportive.
• Sustained move beyond the 1.3000 handle needed to confirm any further gains.

Buying interest around the British pound picked up some pace in the last hour and pushed the GBP/USD pair back above mid-1.2900s, closer to the top end of the weekly trading range.
 
The pair built on the previous session’s late rebound from weekly lows and continued gaining some positive traction through the early North-American session amid a subdued US dollar price action. Despite a goodish intraday pickup in the US Treasury bond yields, the greenback struggled to gain traction and was seen as one of the key factors fueling the positive momentum.

Weaker USD, UK political optimism supportive of the positive move

The US bond yields pushed higher on positive trade-related headlines, wherein China was reported to have extended an invite to US trade negotiations for another round of face-to-face talks. Adding to this, the South China Morning Post report indicated that tariffs on Chinese goods slated to go into effect on December 15 will likely be delayed even if the negotiating parties can’t reach an agreement.
 
The more hopeful trade rhetoric led to a goodish recovery in the global risk sentiment and dented the USD’s perceived safe-haven status against its British countterpart. This coupled with the fact that the incoming UK election polls have been indicating a majority for the Prime Minister Boris Johnson’s Conservative Party continued underpinning the sterling and remained supportive of the intraday positive move.
 
With investors still digesting  the incoming trade headlines, it will now be interesting to see if bulls are able to capitalize on the momentum or the pair continues with its struggle to make it through the key 1.30 psychological mark.

Technical levels to watch