The GBP/USD pair recovery seems to have gained traction, lifting the pair back above 1.3400 handle to currently trade above Tuesday's session high level at 1.3435.
The pair seems to benefit from global risk-on rally, as depicted by a strong rally in European equities, and move away from safe-haven currencies - like the US Dollar. Investors expect some calming statements from the second day of the EU summit, which further seems to support a minor short-covering bounce for the GBP/USD pair.
On the economic data frond, traders would confront the release of core PCE price index, personal spending and pending home sales data from the US and attempt to grab some short-term trading opportunities.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, notes, "The 4 hours chart for the pair shows that the price remains unable to advance beyond a mild bearish 20 SMA, whilst the RSI indicator has bounced modestly from oversold territory, and the Momentum indicator heads north around the 100 level, unable to confirm a bullish continuation.As commented in previous updates, this recent recovery from multi-decades lows seems mostly corrective, with not much upward scope at the time being."
"If the dollar weakens, however, and the pair manages to extend above the mentioned daily high, it could extend its advance up to 1.3480/1.3500, where selling interest is expected to contain it. The immediate short term support stands at 1.3350, with an acceleration below it indicating a downward continuation towards the 1.3300 region."
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