“¢ The prevalent USD selling bias helped reverse an early dip to sub-1.3100 level.
“¢ Brexit uncertainties kept a lid on any meaningful up-move for the major.
“¢ This week’s important macro releases/BoE decision should infuse fresh volatility.
The GBP/USD pair trimmed a major part of its early gains, albeit has managed to hold comfortably above the 1.3100 handle.
The pair quickly reversed an early European session dip to an intraday low level of 1.3096 and caught some fresh bids amid the prevalent weaker tone surrounding the US Dollar.
Friday’s release of the advance US Q2 GDP growth figures, although pointed to a solid economic growth, failed to impress market participants and kept exerting some downward pressure on the greenback.
This coupled with firming BoE rate hike prospects provided an additional boost to the British Pound and remained supportive of the pair’s modest uptick at the start of a new trading week.
Further gains, however, remained capped amid uncertainties surrounding the upcoming Brexit negotiations, which had been one of the key factors capping any meaningful upside for the Sterling.
Despite a good two-way move, the pair lacked any firm directional bias and might continue with its range-bound price-action in absence of any major market-moving economic data, either from the US or the UK.
Moving ahead, this week’s key macro releases, scheduled at the start of a new month, along with the highly anticipated BoE monetary policy decision should infuse a bout of volatility across GBP cross and play an important role in determining the pair’s next leg of directional move.
Technical levels to watch
Immediate resistance remains near the 1.3140 area, above which the pair is likely to aim towards challenging the 1.3180-85 supply zone en-route the 1.3200 handle.
On the flip side, the 1.3090-80 region might continue to protect the immediate downside, which if broken is likely to turn the pair vulnerable to head back towards testing the key 1.30 psychological mark.