- 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