GBP/USD Analysis: In search of a firm near-term direction, Powell’s speech awaited

The GBP/USD pair staged a solid rebound from mid-1.3000s, or one-week lows and rallied over 100 pips on Tuesday. The strong intraday positive move was sponsored by the emergence of some fresh selling around the US dollar and seemed rather unaffected by weaker UK data. The optimism over a potential vaccine and treatment for the highly contagious coronavirus diseases remained supportive of the upbeat market mood. This coupled with easing concerns about a diplomatic standoff between the US and China undermined the greenback's relative safe-haven status. The USD failed to gain any respite from a strong pickup in the US Treasury bond yields.

Meanwhile, the lack of progress in Brexit talks did little to hinder the momentum, with bulls shrugging off weaker UK CBI distributive trade survey. In fact, sales fell into negative territory to -6% in August from +4% in July. From the US, the Conference Board's Consumer Confidence Index tumbled to the lowest level in more than six years and came in at 84.8 in August. The data fueled concerns about the US economic recovery and kept a lid on the risk-on mood. This, in turn, drove some haven flows towards the USD. This, along with investors' reluctance to place aggressive bets ahead of the Jackson Hole Symposium capped gains for the major.

The pair edged lower during the Asian session on Wednesday and in the absence of any major market-moving economic releases from the UK, remains at the mercy of the USD price dynamics. Later during the early North American session, the release of the US Durable Goods Orders data will be looked upon for some short-term trading opportunities. The key focus, however, will remain on the Fed Chair Jerome Powell's speech on Thursday, which will be closely scrutinized for clues over the US central bank's future monetary policy stance.

Short-term technical outlook

From a technical perspective, the pair has been confined in a range over the past one week or so, making it prudent to wait for a sustained move in either direction before positioning for the near-term trajectory. Some follow-through weakness below mid-1.3000s will be seen as a fresh trigger for bearish traders and accelerate the slide further towards the key 1.3000 psychological mark. A subsequent break below monthly lows, around the 1.2980 region, will set the stage for an extension of the corrective slide from YTD tops set last week.

On the flip side, sustained strength beyond the overnight swing high, around the 1.3170 region, should lift the pair back to the 1.3200 round-figure mark. The momentum could further get extended toward the 1.3250-60 strong resistance zone, above which bulls might aim to reclaim the 1.3300 round-figure mark.