The GBP/USD pair traded with positive bias for the sixth consecutive session and held on to its gains above the 1.2800 handle, albeit has failed to break through nearly three-week highs touched in the previous session.
The pair failed to extend the up-move further beyond mid-1.2800s amid sharp US Dollar rebound, primarily led by intense selling pressure around the EUR/USD major following news report that the market misinterpreted ECB President Mario Draghi's remarks on Tuesday.
• US Dollar could depreciate is a new perception - Natixis
Against the backdrop of persistent up-move in the US Treasury bond yields, which kept a lid on the pair's up-move through European trading session, a modest greenback recovery seems to have prompted some profit-taking slide and dragged the pair back towards 1.2825-20 region.
Market focus on Wednesday would remain on Carney's speech during a panel discussion at the European Central Bank Forum. Meanwhile the release of pending home sales data from the US is likely to pass unnoticed as did the goods trade balance and prelim wholesale inventories data.
• GBP/USD neutral, room for a test of 1.2920 – UOB
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet writes: "The technical picture favors the upside, although the upward momentum seems limited as the price remains trapped within a limited intraday range. In the 4 hours chart, the price holds far above a bullish 20 SMA and also above the 200 EMA, while technical indicators consolidate around overbought readings. To extend its advance, the pair needs to surpass 1.2860, the mentioned weekly high, while below 1.2790, the risk turns towards the downside for the rest of the day."
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