“¢ A subdued USD price action helped regain some positive traction on Monday.
“¢ Brexit uncertainties might continue to undermine the GBP and cap further gains.
The GBP/USD pair finally broke out of its intraday consolidative trading range and spiked to fresh session tops, around the 1.3025-30 region in the last hour.
After Friday’s intraday pullback of around 50-pips, the pair managed to regain some positive traction at the start of a new trading week and was being supported by a mildly weaker tone surrounding the US Dollar.
Against the backdrop of Friday’s softer than expected US consumer inflation figures, the risk-off mood-led slump in the US Treasury bond yields kept the USD bulls on the defensive and was seen driving the pair higher.
Meanwhile, the latest comments by the UK PM Theresa May’s spokesman, saying that the UK cross-party Brexit talks are serious and both sides have discussed many issues, remained supportive of the positive move.
However, the fact that even after more than a month of negotiations, both parties are still far from reaching an agreement to break the impasse investors might hold back from placing any aggressive bullish bets.
This coupled with the global flight to safety, triggered by the recent escalation of the US-China trade tensions might further collaborate towards keeping a lid on any further up-move for the major, at least for the time being.
Hence, it would be prudent to wait for a strong follow-through buying before traders start positioning for any further intraday up-move amid absent relevant market moving economic releases on Monday.
Technical levels to watch
As Yohay Elam, FXStreet’s own Analyst writes: “Resistance awaits at 1.3035 that was a temporary high last week before GBP/USD hit a high of 1.3050. The next level to watch is 1.3080 which separated ranges earlier in May, and 1.3130 that was a swing higher around the same time.”
“Initial support awaits at 1.2990 which supported the currency pair twice in May. This month’s low at 1.2965 is next down the line, and it is followed by 1.2920 and 1.2870 which defined the low range in late April,” he added further.
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