GBP/USD retakes 1.3100 mark and beyond, but lacks follow-through

Haresh Menghani FXStreet

• A modest USD retracement helps regain some positive traction.
• BoE rate hike prospects provide an additional boost to GBP.
• Brexit uncertainties keep a lid on any strong follow-through.

After an initial dip to 1.3070 area, the GBP/USD pair caught some fresh bids and jumped to a session high level of 1.3130 during the early European session.

The latest leg of a sharp spike over the past hour or so lacked any obvious catalyst and could be solely attributed to a modest US Dollar retracement. The greenback struggled to build on overnight up-move and was seen as one of the key factors driving the pair higher.

This coupled with August BoE rate hike prospects underpinned the British Pound and further collaborated to the pair's steady climb of nearly 60-pips from session lows. However, Brexit uncertainties kept a lid on any follow-through up-move amid absent market moving economic releases from the UK.

Currently holding with modest gains, just above the 1.3100 handle, traders now look forward to the US economic docket, featuring the second-tier release of manufacturing and services PMI, for some fresh impetus.

Technical levels to watch

Any subsequent up-move might continue to confront resistance near the 1.3155-60 region, above which the pair seems all set to aim towards reclaiming the 1.3200 handle.

On the flip side, the 1.3080-70 region now seems to have emerged as an immediate support, which if broken might turn the pair vulnerable to head back towards challenging the key 1.30 psychological mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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