GBP/USD climbs further beyond mid-1.2300s, fresh session tops ahead of US CPI
|- GBP/USD showed some resilience below 1.2300 mark and edged higher amid weaker USD.
- A fresh leg down in the US bond yields, negative Fed rate speculations weighed on the USD.
- Brexit-related uncertainties might hold bulls from placing aggressive bets and cap the GBP.
The intraday USD selling pressure picked up pace during the mid-European session and lifted the GBP/USD pair back above mid-1.2300s, or fresh daily tops.
The pair once again showed some resilience below the 1.2300 round-figure mark and attracted some dip-buying on Tuesday amid a modest US dollar pullback from two-week tops. Against the backdrop of speculations that the Fed might push interest rates below zero, a fresh leg down in the US Treasury bond yields undermined the greenback and was seen as one of the key factors driving the pair higher.
This coupled with a goodish rebound in the equity markets dented the greenback's relative safe-haven status against its British counterpart. However, growing fears about the second wave of coronavirus infections might help limit any meaningful USD downfall. This coupled with the lack of progress in the post-Brexit negotiations might take its toll on the sterling and cap any strong gains for the pair.
Even from a technical perspective, the pair has formed a bearish double-top chart pattern near the very important 200-day SMA. Hence, any subsequent positive move might still be seen as a selling opportunity and keep a lid on the GBP/USD pair's positive move near the 1.2400-1.2420 supply zone.
Moving ahead, market participants now look forward to the release of the US consumer inflation figures. The data, along with speeches by FOMC members might influence the USD price dynamics and produce some meaningful trading opportunities ahead of Wednesday's important UK macro data, including the prelim GDP report for the first quarter of 2020.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.