The GBP/USD pair once again ran through some fresh offers near last week's hawkish BoE vote led swing high resistance near 1.2815-20 region and is now headed to the lower end of daily trading range.
A fresh wave of greenback buying interest, in wake of upbeat comments by New York Fed President William Dudley, has been the sole driver of the pair's fall in the past hour or so. During a business roundtable with local business leaders in Plattsburgh, New York, Dudley was noted saying that stopping rate increases at this point could be dangerous for the economy, while wage inflation should pick-up further as the labor market tightens.
• Fed's Dudley: Halting tightening cycle would damage economy
Dudley's hawkish comments triggered a fresh leg of sharp up-move in the US Treasury bond yields and underpinned the greenback demand, lifting the key US Dollar Index back above the 97.00 handle, which eventually dragged the pair back closer to mid-1.2700s.
Looking at the broader picture, the pair remains within 4-day old broader trading range between 1.2690-1.2820 and hence, would still be categorized as consolidative phase amid uncertainty surrounding the Brexit negotiations.
• GBP futures: further consolidation lies ahead
Technical levels to watch
A follow through retracement below mid-1.2700s could drag the pair to lower end of the trading range support near the 1.2700 handle, which if broken might turn the pair vulnerable to head back towards UK snap election result-led swing lows support near 1.2635-30 region.
On the flip side, the pair might continue to face some fresh support near 1.2800-1.2820 region, above which a fresh bout of short-covering has the potential to lift the pair towards 1.2885 resistance area ahead of the 1.2900 handle.
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