The GBP/USD pair stalled its recent upsurge, with a modest US Dollar rebound on Tuesday prompting some profit-taking on Tuesday. With investors looking past the latest escalation of the US-China trade spat, surging US Treasury bond yields helped the greenback to recover early lost ground to near seven-week lows. However, Brexit optimism continued to underpin the British Pound and helped limit and immediate sharp decline for the major.
The pair regained positive traction during the Asian session on Wednesday but once again failed to build on its momentum beyond the 100-day SMA immediate strong hurdle. Today's UK economic docket highlights the release of latest inflation figures for the month of August. The headline CPI is expected to tick down slightly to 2.4% y/y from 2.5% previous and any positive surprise would be enough to provide the required momentum to finally break through the near-term barrier.
From a technical perspective, any meaningful up-move from current levels is likely to confront fresh supply near a short-term ascending trend-line, around the 1.3190-1.3200 region. The said hurdle, along with another ascending trend-line now seems to constitute towards the formation of a bearish reversal - rising wedge chart pattern, on the 1-hourly chart, indicating that the recent up-move might have already started to lose momentum.
A convincing break below the pattern support, currently near the 1.3145-40 region, will reinforce the bearish set-up and prompt some aggressive long-unwinding trade. Momentum below the mentioned support is likely to accelerate the slide towards 1.3110-1.3100 intermediate zone before the pair eventually drops back to the 1.3060-50 support area. A follow-through selling has the potential to continue dragging the pair further towards testing the key 1.30 psychological mark.
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