The GBP/USD pair traded with mild positive bias and moved further beyond the 1.2800 handle, closer to last week's swing high resistance near 1.2815-20 region.
As the much awaited Brexit talks gets underway, receding fears of a 'hard Brexit', especially after the disastrous UK snap election result, coupled with hawkish BoE vote was seen lending some support to the British Pound.
• UK: Focus on Brexit negotiations this week – BBH
Adding to this, a softer tone around the US Treasury bond yields, which failed to provide any fresh bullish impetus to the US Dollar, remained supportive of the bid tone surrounding the major.
It, however, remains to be seen if the pair is able to build on the up-move or runs through fresh offers at higher level, and reaffirm broader near-term trading range, amid absent fundamental drivers in-terms of any major market moving economic releases.
This week, investors will look forward to a slew of speeches from influential FOMC members to back prospects of a faster Fed rate-tightening cycle through 2017, which should influence sentiment surrounding the buck and eventually provide some short-term trading impetus.
• GBP expected to trade in a jittery fashion - Rabobank
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet writes: "The 200 EMA in the mentioned level stands at 1.2820, the level to break to confirm additional gains for this Monday, up to the 1.2850/60 region. Below 1.2810 on the other hand, the pair has scope to test Friday's low of 1.2751, with a directional breakout being unlikely for this first day of the week."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD could extend the recovery to 0.6500 and above
The enhanced risk appetite and the weakening of the Greenback enabled AUD/USD to build on the promising start to the week and trade closer to the key barrier at 0.6500 the figure ahead of key inflation figures in Australia.
EUR/USD now refocuses on the 200-day SMA
EUR/USD extended its positive momentum and rose above the 1.0700 yardstick, driven by the intense PMI-led retracement in the US Dollar as well as a prevailing risk-friendly environment in the FX universe.
Gold struggles around $2,325 despite broad US Dollar’s weakness
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Bitcoin price makes run for previous cycle highs as Morgan Stanley pushes BTC ETF exposure
Bitcoin (BTC) price strength continues to grow, three days after the fourth halving. Optimism continues to abound in the market as Bitcoiners envision a reclamation of previous cycle highs.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Federal Reserve might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.