GBP/USD sticks to modest daily gains, but remains below 1.29 handle

The GBP/USD faded a knee-jerk bullish spike and retreated around 40-pips from session tops near the 1.2920 region, touched during the early European session.

The early up-move was supported by persistent US Dollar selling bias, led by fading optimism over the US President Donald Trump's ability to push through pro-growth economic policies. Following the disbanding of two business panels on Wednesday, the Trump abandoned plans for an advisory council on infrastructure spending and further dampened sentiment around the already weaker greenback. 

The buck was also being weighed down by growing market consensus that the Fed might refrain from raising interest rates further in 2017 but did little to help the pair to register any meaningful recovery from over one-month lows touched on Wednesday. 

   •  USD: Guided by politics or economics? - Rabobank

Meanwhile, the sentiment around the British Pound seems to have turned weak, especially after a dovish BoE monetary policy decision, which further collaborated towards keeping a lid on the pair's up-move. 

From a technical perspective, the recent price-action over the past three days could be categorized as consolidative phase before the pair extends its corrective slide from yearly tops near the 1.3270 region, touched earlier this month. 

   •  GBP/USD still sees 1.3267 as the end of the up move – Commerzbank

Next on tap would be the release of Prelim UoM Consumer Sentiment Index from the US, which could provide some trading impetus ahead of a scheduled speech by Dallas Fed President Robert Kaplan.

   •  US consumer sentiment amongst market movers today – Danske Bank

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the pair presents a neutral stance in the short term, as in the 4 hours chart, the price is retreating around a bearish 20 SMA, whilst technical indicators head nowhere around their mid-lines. The weekly low was set at 1.2840, the level to break to favor a new leg lower, whilst above 1.2920, the pair can extend up to 1.2965, where selling interest will likely contain the rally."