GBP/USD spikes to session tops, lacks follow-through

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  • The overnight not so optimistic Brexit comments kept exerting some downward pressure initially.
  • Some renewed USD weakness, despite upbeat industrial production data, helped regain traction.

The GBP/USD pair reversed an intraday dip to sub-1.2400 level and refreshed session tops, around the 1.2440 region in the last hour, albeit lacked any strong follow-through.
 
The pair initially was seen extending the overnight modest retracement slide from the key 1.2500 psychological mark – or multi-week tops – and remained on the defensive for the second consecutive session on Tuesday, albeit continued showing some resilience below the 1.2400 round-figure mark.
 
Monday’s not so encouraging Brexit-related comments by Luxembourg Prime Minister Xavier Bettel, reiterating that the European Union won’t extend the Brexit deadline “just for the sake of another extension”, turned out to be one of the key factors weighing on the British Pound.

Weaker USD helped limit the intraday downtick

Meanwhile, the US Dollar failed to capitalize on the previous session’s goodish intraday bounce and remained on the defensive amid a fresh leg of a downfall in the US Treasury bond yields, which eventually turned out to be one of the key factors that helped limit any further downside.
 
On the economic data front, the US industrial production data came in much better-than-expected market expectations, though failed to impress the USD bulls rather passed un-noticed as the key focus remains on the highly anticipated FOMC policy meeting, starting this Tuesday.

Technical levels to watch

 

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