GBP/USD forecast: Bulls await a sustained break through 1.2750-60 supply zone

The GBP/USD pair had good two-way price moves on Friday and was influenced by the US Dollar price dynamics. The pair initially fell to a daily low level of 1.2642 amid rising odds of a no-deal Brexit and was further weighed down by the BoE's downward revision of the Q2 GDP estimate in the previous session. The downtick, however, turned out to be short-lived, with some aggressive USD selling helping the pair to rebound over 100-pips intraday.

The Fed vice Chair Richard Clarida's comments - saying that the case for providing more accommodation has increased, reaffirmed the US central bank's dovish outlook and kept exerting some downward pressure on the greenback. The USD selling aggravated further in the wake of the disappointing release of the flash US manufacturing PMI, which showed a further deterioration and dropped to 50.1 in June from 50.5 in the previous month.

The pair rallied back closer to the 1.2750-60 supply zone and held near the mentioned barrier through the Asian session on Monday, awaiting fresh catalyst to extend the recent upswing from the key 1.2500 psychological mark or multi-month lows. The fact that Boris Johnson is still seen as the favourite to be the next British Prime minister, investors still seemed reluctant to place any aggressive bullish bet and might continue to cap any further gains. 

Hence, traders are likely to wait for a convincing break through the said resistance, which if cleared decisively might set the stage for a strong follow-through up-move towards reclaiming the 1.2800 handle en-route the next major supply zone near the 1.2840-45 region. On the flip side, the 1.2700 round figure mark now seems to act as an immediate support, below which the slide could further get extended back towards the 1.2650-40 horizontal support. 

A convincing break through the mentioned support levels might turn the pair vulnerable to break through the 1.2600 handle and accelerate the slide towards the 1.2570-65 support area. A follow-through selling will indicate the resumption of the prior bearish trend and pave the way for a move back towards challenging the key 1.2500 psychological mark.