GBP/USD climbs beyond mid-1.2500s, fresh 1-month tops amid notable USD supply
|- GBP/USD added to the overnight strong gains and was being supported by sustained USD selling.
- Optimism over the global economic recovery continued weighing on the safe-haven greenback.
- Brexit uncertainties might hold investors from placing fresh bullish bets ahead of the EU-UK talks.
The GBP/USD pair maintained its bid tone through the early European session and jumped to fresh one-month tops, just above mid-1.2500s.
The pair added to the previous day's strong intraday positive move of around 180 pips and gained some follow-through traction for the fourth straight session on Tuesday. The uptick also marks the GBP/USD pair's positive move for the sixth day in the previous seven and was sponsored by the prevalent US dollar selling bias.
The recent optimism over the easing of lockdown restriction across the world and hopes of a sharp V-shaped recover for the global economy remained supportive of the upbeat market mood. This, in turn, weighed heavily on the USD's relative safe-haven status, which was seen as one of the key factors driving the GBP/USD pair higher.
The risk-on environment was evident from a goodish pickup in the equity markets and seemed rather unaffected by worsening US-China relations. In the latest developments around the US-China saga, the dragon nation on Monday halted orders of US soybeans and other agricultural products, and also cancelled some pork orders.
Apart from a broad-based USD weakness, the momentum lacked any obvious fundamental catalyst and is more likely to remain capped amid the increasing risk of a hard Brexit. Hence, the focus now shifts to the latest round of trade talks between the UK and EU, which will now play a key role in influencing the sentiment surrounding the sterling.
Technical levels to watch
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