GBP/USD refreshes session tops, eyeing a move beyond 1.2900 mark

The GBP/USD pair refreshed daily tops during the early European session, with bulls making a fresh attempt to build on the momentum beyond the 1.2900 mark.

The pair managed to attract some dip-buying ahead of the 1.2800 round-figure mark and turned positive for the second consecutive session on Tuesday. The uptick was supported by a pickup in demand for the British pound and the prevalent selling bias around the US dollar.

Sentiment surrounding the sterling turned positive despite the passage of the UK government's controversial bill, designed to override parts of the Brexit Withdrawal Agreement (BWA) with the EU. MPs will now begin detailed scrutiny of the bill on Tuesday.

Given that the EU has threatened to pursue legal action against the UK over breach of BWA, the latest development added to growing market fears of a no-deal Brexit. The GBP bulls, however, largely shrugged off the concerns, instead took cues from mostly upbeat UK jobs data.

The latest optimism over a potential vaccine for the highly contagious coronavirus disease remained supportive of the prevalent risk-on environment. This, in turn, undermined the greenback's relative safe-haven status and provided an additional boost to the GBP/USD pair.

Investors, however, might refrain from placing aggressive bets ahead of the key central bank events – the FOMC on Wednesday and BoE on Thursday. Hence, it remains to be seen if the GBP/USD pair is able to capitalize on the move or meets with some fresh supply at higher levels.

Tuesday's US economic docket features the release of Empire State Manufacturing Index and Industrial Production figures, due later during the early North American session. The data is unlikely to provide any meaningful impetus and largely pass unnoticed.

Technical levels to watch