GBP/USD spikes to weekly tops, eyeing to reclaim 1.3000 mark ahead of FOMC

• GBP/USD continued gaining positive traction for the third consecutive session on Wednesday.
• The heavily offered tone surrounding the USD was seen as a key factor driving the pair higher.
• The focus remains firmly on the highly anticipated FOMC decision ahead of BoE on Thursday.

The GBP/USD pair shot to fresh weekly tops during the early North American session, with bulls now eyeing to reclaim and build on the momentum beyond the key 1.3000 psychological mark.

As investors digested the recent developments surrounding the Brexit saga, the heavily offered tone surrounding the US dollar assisted the GBP/USD pair to build on its recent bounce from seven-week lows. The USD bearish pressure remained unabated following the release of disappointing US Monthly Retail Sales figures for August.

Data published by the US Census Bureau revealed on Wednesday showed that the headline sales rose by 0.6% MoM in August as compared to the 1% rise anticipated. Adding to this, the previous month’s reading was also revised lower to 0.9% from 1.2% reported earlier. Meanwhile, sales excluding autos also missed expectations and grew 0.7% MoM.

Apart from a broad-based USD weakness, possibilities of some short-term trading stops being triggered above the 1.2915-20 region further contributed to the strong momentum for the third consecutive session. It, however, remains to be seen if the GBP/USD pair is able to capitalize on the move or runs into some fresh supply at higher levels.

Wednesday’s key focus will remain on the highly anticipated FOMC monetary policy decision and updated economic/inflation projections. Some repositioning trade ahead of the key central bank event might infuse some volatility around the GBP/USD pair and produce some meaningful trading opportunities.

Technical levels to watch