The GBP/USD pair regained positive traction on Tuesday and touched a one-week high level of 1.3160. Against the backdrop of some renewed US Dollar weakness, the British Pound got an additional boost after the UK PM Theresa May announced that she will personally lead the Brexit negotiations with the European Union.
Meanwhile, the deadline for exiting the European Union is now less than nine months away and with no workable plan in sight, concerns over a no-deal Brexit was now seen keeping a lid on any further up-move for the British Pound.
There isn't any major market-moving economic data due for releases on Wednesday and hence, the pair seems more likely to be influenced by any fresh Brexit headlines and the broader market sentiment surrounding the buck. Moving ahead, the upcoming US macro data - durable goods and advance Q2 GDP growth figures, might provide some short-term directional impetus ahead of next week's BoE monetary policy decision.
From a technical perspective, the ongoing recovery move seems nothing but a corrective bounce within a well-established bearish trend, as depicted by a descending trend-channel formation on the daily chart. Hence, any subsequent up-move beyond the current resistance area, marked by 50% Fibonacci retracement level of the 1.3363-1.2957 recent downfall, could get extended but is likely to be capped near the 1.3200 handle.
On the flip side, any meaningful retracement is likely to find support near the 1.3110-1.3100 region (38.2% Fibonacci retracement level), which if broken would reinforce the bearish bias and drag the pair towards 1.3050 support area. A follow-through selling has the potential to continue exerting downward pressure back towards the key 1.3000 psychological mark.
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