GBP/USD consolidates near multi-year tops, 1.3800 mark remains in sight
FXStreet News

GBP/USD consolidates near multi-year tops, 1.3800 mark remains in sight

  • Renewed USD selling bias pushed GBP/USD to fresh multi-year tops on Tuesday.
  • The risk-on mood, retreating US bond yields exerted some pressure on the USD.
  • Sustained move beyond the 1.3755-60 region has set the stage for further gains.

The GBP/USD pair maintained its bid tone through the early European session and now seems to have entered a bullish consolidation phase near multi-year tops, around the 1.3775 region.

The pair built on the previous day’s goodish intraday bounce from the 1.3680 region and gained some strong follow-through traction on Tuesday. The momentum pushed the GBP/USD pair further beyond the 1.3755-60 region and was sponsored by the emergence of some fresh selling around the US dollar.

The USD bulls turned cautious amid doubts about a relatively faster US economic recovery following the release of rather unimpressive US jobs report on Friday. This, along with a modest pullback in the US Treasury bond yields, weighed on the greenback and provided a modest lift to the GBP/USD pair.

Meanwhile, the progress in coronavirus vaccinations and developments to fast-track the US President Joe Biden’s proposed $1.9 trillion stimulus package remained supportive of the underlying bullish sentiment. This was seen as another factor that further undermined the USD’s safe-haven demand.

With Tuesday’s positive move, the GBP/USD pair already seems to have confirmed a near-term bullish breakout and seems poised to extend the positive momentum. A sustained move beyond the 1.3800 mark will reaffirm the constructive set-up and pave the way for a further near-term appreciating move.

In the absence of any major market-moving economic releases, either from the UK or the US, the USD price dynamics will play a key role in influencing the GBP/USD pair’s intraday movement. Traders might further take cues from the broader market risk sentiment to grab some short-term opportunities.

Technical levels to watch


FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.