GBP/USD jumps to mid-1.2700s after dismal US durable goods orders

After a volatile swing during mid-European session, the GBP/USD pair is now headed back to the top end of daily trading range following the release of US macro data.

The pair caught some fresh bids after data released from the US showed durable goods orders contracted more-than-expected by -1.1% during May as against -0.6% expected and -0.8% previous. Meanwhile, core durable goods orders (excluding transportation items) rebounded a bit and came-in to show a tepid growth of 0.1% vs 0.5% expected. 

The data triggered a fresh leg of downslide in the US Treasury bond yields and was seen weighing on the US Dollar, eventually helping the pair to regain traction and move back to mid-1.2700s. 

Earlier during European session, the pair filled weekly bullish gap and retested the 1.2700 handle before recovering quickly on the latest UK political headlines that the UK PM May’s Conservatives party has reached an agreement with the Democratic Unionist Party (DUP) to form a minority government.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "Technically, the 4 hours chart shows that the price keeps retreating towards a bullish 20 SMA, this last offering an immediate dynamic support around 1.2690, while technical indicators retreat within positive territory, supporting a bearish extension on a break below the mentioned level. Next intraday supports come at 1.2665 and 1.2635, with further slides below this last exposing 1.2588, the low set last week. Above the mentioned daily high, on the other hand, the pair can extend its advance up to 1.2800, although profit taking around this last will likely prevent the pair from advancing further."