- GBP/USD gained traction for the third straight day, albeit struggled to capitalize on the move.
- A modest pickup in the US bond yields underpinned the USD and capped gains for the major.
- A subsequent slide below the 1.3745-40 region will shift the bias in favour of bearish traders.
The GBP/USD pair retreated around 50 pips from daily tops and was last seen hovering near the lower boundary of its daily trading range, just above mid-1.3700s.
The pair prolonged this week's rebound from the 100-day SMA support near the 1.3670-65 region and gained traction for the third consecutive session on Wednesday. The momentum pushed the GBP/USD pair to one-week tops and was exclusively sponsored by sustained US dollar selling through the first half of the trading action.
Bulls, however, struggled to capitalize on the move or find acceptance above the 1.3800 round-figure mark. As investors digested Tuesday's rather unimpressive US CPI report, a modest pickup in the US Treasury bond yields assisted the USD to rebound from three-week lows and prompted some selling around the GBP/USD pair.
Apart from this, concerns about a possible link between the AstraZeneca coronavirus vaccine and a rare blood clotting disorder further held the GBP bulls from placing fresh bets. Investors now seem worried that a temporary ban on the jab for the below 30 age group could delay the UK government's plan to reopen the economy.
Even from a technical perspective, the emergence of some selling at higher levels suggests that the positive move witnessed since the beginning of this week might have run out of steam. A subsequent slide below the 1.3745-40 region will reaffirm the negative bias and turn the GBP/USD pair vulnerable to slide further.
There isn't any major market-moving economic data due for release on Wednesday. Hence, the key focus will be on a scheduled speech by Fed Chair Jerome Powell later during the US session. This, along with the US bond yields, will influence the USD price dynamics and produce some short-term trading opportunities around the GBP/USD pair.
Technical levels to watch
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