GBP/USD jumps back closer to mid-1.3800s, fresh session tops

The GBP/USD pair rallied around 45 pips during the early European session and refreshed daily tops, around the 1.3845 region in the last hour.

The pair staged a goodish rebound from the 1.3800 mark, or two-week lows touched earlier this Monday and has now recovered a part of the previous session's heavy losses. The uptick was exclusively sponsored by the emergence of some selling around the US dollar, though the UK political jitters might cap the upside for the GBP/USD pair.

The US dollar struggled to capitalize on last week's goodish rebound from the lowest level since February 26 amid expectations that the Fed will keep interest rates low for a longer period. This, along with the underlying bullish sentiment in the financial markets, further undermined the greenback's relative safe-haven status.

Meanwhile, the risk posed by the Scottish elections this week might hold bullish traders from placing any aggressive bets around the GBP/USD pair. Polls are pointing to a supermajority for pro-independence parties in Scotland's parliament, which might intensify pressure on the UK PM Boris Johnson to allow a second independence referendum.

Investors might also prefer to wait on the sideline ahead of the latest monetary policy update by the Bank of England on Thursday. Moreover, the UK banks are closed in observance of May Day. This makes it prudent to wait for some follow-through buying before positioning for any meaningful upside amid absent relevant market-moving UK economic releases.

Later during the early North American session, traders might take cues from the release of the US ISM Manufacturing PMI. Apart from this, a scheduled speech by Fed Chair Jerome Powell will influence the USD price dynamics, which might provide some impetus to the GBP/USD pair and allow traders to grab some short-term opportunities.

Technical levels to watch