The GBP/USD pair managed to preserve Friday's disappointing US CPI-led recovery gains but has held within a 100-pips broader trading range above the 1.2935-30 important confluence support. On Friday, the pair managed to rebound from near four week lows and was being supported by some renewed US Dollar selling pressure following the release of softer US July inflation figures, which weighed on possibilities of any aggressive Fed monetary policy tightening cycle.
The pair, however, has failed to gain any strong follow through traction and remained capped below an immediate strong resistance near the 1.3030 region. Against the backdrop of perceived dovish BoE monetary policy decision, last week's mixed UK macro data further weakened the sentiment around the British Pound and seems to be contributing towards restricting any strong up-move.
In absence of any major market moving economic releases on Monday, the USD price dynamics might now act as an exclusive driver of the pair's movement ahead of Tuesday important releases - UK inflation figures and US monthly retail sales data.
Technically, the pair has been confined in a rectangular chart formation on short-term charts and hence, it would be prudent to wait for a decisive break through the recent trading range before committing to the next leg of directional move. Bulls would eyeing for a strong follow through buying interest beyond 1.3030 immediate hurdle, above which a fresh bout of short-covering could assist the pair to aim back towards reclaiming the 1.3100 handle.
Conversely, any pull-back below 1.2975 horizontal support might continue to find strong support near mid-1.2900s. This is followed by a strong support near the 1.2935-30, comprising of 50-day SMA and 50% Fibonacci retracement level of 1.2589-1.3269 recent up-swing, which if broken convincingly would confirm a fresh bearish breakdown and turn the pair vulnerable to aim towards testing 61.8% Fibonacci retracement level support near mid-1.2800s.
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