GBP/USD refreshes session tops, around 1.3930 amid notable USD supply

The GBP/USD pair built on its intraday positive move through the first half of the European session and shot to fresh daily tops, around the 1.3925-30 region in the last hour.

Following the previous day's post-BoE two-way price moves, the pair caught some fresh bids on the last trading day of the week and was supported by a combination of factors. The British pound was underpinned by the Bank of England's more upbeat economic forecasts and decided to slow the pace of weekly bond buying.

In fact, the UK central bank predicted that the economy will rebound at its fastest pace since WW-II and the 2021 GDP growth estimate was revised higher to 7.25% from 5.0% previous. The BoE sees inflation averaging 2.5% in 2021. This, along with the prevalent US dollar selling, provided a goodish lift to the GBP/USD pair.

Expectations that the Fed will keep interest rates low for a longer period kept the USD bulls on the defensive. Apart from this, the underlying bullish sentiment in the financial markets further dented the USD's safe-haven status. Even a goodish pickup in the US Treasury bond yields did little to lend any support to the greenback.

That said, the uncertainty over the outcome of the Scottish parliament election kept a lid on any strong gains for the GBP/USD pair, at least for now. If the Scottish Nationalist Party, or SNP, wins an overall majority in the elections, first minister Nicola Sturgeon has promised to demand a second referendum on independence from the UK.

Investors might also refrain from placing aggressive bets, rather prefer to wait on the sidelines ahead of Friday's release of the closely-watched US monthly jobs report. Economists anticipate another blockbuster month of jobs growth and forecast the headline NFP print to show an addition of nearly one million jobs in April.

The unemployment rate is also expected to dip to 5.8% from 6.0% in March, though might not be enough to shift the Fed rate expectations or impress the USD bulls. This, in turn, suggests that the path of least resistance for the GBP/USD pair remains up, though bulls might await for a move beyond the key 1.4000 psychological mark before placing fresh bets.

Technical levels to watch