GBP/USD Analysis: Bulls remains in control near multi-month tops

The GBP/USD pair built on last week's strong positive move and gained some follow-through traction on the first day of a new trading week. The momentum was exclusively sponsored by the heavily offered tone surrounding the US dollar and pushed the pair to its highest level since March 11. Investors remain concerned that the economic recovery in the US could be grinding to a halt amid the resurgence in coronavirus cases. This, in turn, fueled speculations that the Fed would add more stimulus for a longer period of time and in bigger quantities. This was evident from the ongoing slide in the US Treasury bond yields, which kept the USD bulls on the defensive through the first half of the trading action on Monday.

Meanwhile, the move up seemed rather unaffected by renewed worries about a no-deal Brexit. It is worth recalling that the latest round of negotiations ended last Thursday without any significant progress on the post-Brexit trade deal. Both the UK and the EU said that talks remain at a stalemate and they were still some way off reaching an agreement. Britain's chief Brexit negotiator David Frost even said that the UK should be prepared for all scenarios for the end of the transition period on December 31, including the possibility that a deal will not be reached. This comes days ahead of the UK Prime Minister Boris Johnson's July deadline for a preliminary deal, albeit did little to hinder the pair's ongoing positive move.

There isn't any major market-moving economic data due for release from the UK and hence, the USD price dynamics might continue to act as an exclusive driver of the pair's momentum on Monday. Meanwhile, the US economic docket highlights the release of Durable Goods Orders data for June, which will be looked upon to grab some meaningful trading opportunities later during the early North American session.

Short-term technical outlook

From a technical perspective, a sustained move beyond the 1.2800 mark supports prospects for additional gains. However, slightly overbought conditions on the daily chart warrant some caution before placing aggressive bullish bets. Hence, any further move up is more likely to confront stiff resistance, rather remain capped near the 1.2875-80 region.

On the flip side, the 1.2800 round-figure mark now seems to protect the immediate downside, which if broken might prompt some technical selling and accelerate the slide further towards the 1.2765-60 region. That said, the dip might still be seen as a buying opportunity and seems more likely to remain limited.