• Continues gaining positive traction for the fourth consecutive session.
• USD selling bias negates Brexit uncertainties and remains supportive.
• Investors look forward to Barnier's presser for fresh impetus.
The GBP/USD pair finally broke out of its European session consolidation phase and surged to fresh 1-1/2 week tops, beyond mid-1.2800s in the past hour.
The pair built on last week's goodish rebound from over 13-month lows and continued gaining positive traction for the fourth consecutive session on Tuesday. The US Dollar remained on the back-foot following the US President Donald Trump's overnight critical comments over the Fed's monetary policy tightening and was seen as one of the key factors driving the pair higher.
The USD selling remained unabated despite a goodish pickup in the US Treasury bond yields, with bullish also looking past the latest Brexit headlines, wherein the EU is expected to hold emergency summit in November amid scepticism over striking any Brexit agreement before an informal deadline in October.
The latest leg of up-move could further be attributed to some short-covering above European session high, around the 1.2845 region, coinciding with 38.2% Fibonacci retracement level of the pair's downfall since the beginning of this month.
Hence, a follow-through up-move, led by fresh technical buying, now seems a distinct possibility. However, technical indicators on the daily chart are yet to catch up with the positive momentum and RSI (14) on hourly charts has already moved into overbought territory.
This might now turn out to be only factors capping any further up-move ahead of the EU chief Brexit negotiator Michel Barnier's presser at 17:15 in Brussels.
Levels to watch
Meanwhile, the ongoing positive momentum could continue lifting the pair further towards reclaiming the 1.2900 handle, above which bulls are likely to target 1.2935-40 horizontal zone.
On the flip side, the 1.2850-45 zone now seems to protect the immediate downside and is followed by a strong support near the 1.2800-1.2790 region, which if broken might negate prospects for any further near-term recovery.
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