- GBP/USD turns positive for the eighth consecutive session amid some renewed USD selling.
- A sharp fall in the US bond yields, dovish Fed expectations capped the attempted USD bounce.
- Technical buying above the 1.2900 mark led to the latest leg of a sudden spike in the last hour.
The GBP/USD pair edged higher during the early North American session and jumped to the highest level since March 11, around the 1.2930-35 area in the last hour.
The pair managed to attract some dip-buying near the 1.2835 region and has now moved into the positive territory for the eighth consecutive session. The US dollar struggled to capitalize on its attempted bounce from two-year tops, instead witness some selling at higher levels and was seen as a key factor driving the GBP/USD pair higher.
Despite the optimism over the next round of the US fiscal stimulus measures, the US dollar struggled to preserve its early gains amid a sharp intraday pullback in the US Treasury bond yields. This coupled with speculations of further monetary easing by the Fed further collaborated towards capping any meaningful upside for the buck.
The USD was further pressured by Tuesday's release of weaker-than-expected Consumer Confidence Index, which fell to 92.6 in July. This marked a notable drop from the previous month's reading of 98.3 and also fell short of consensus estimates pointing to a reading of 94.5. This, in turn, failed to provide any meaningful impetus to the USD.
Meanwhile, the latest leg of a sudden spike over the past hour or so could further be attributed to some technical buying above the 1.2900 round-figure mark. It will now be interesting to see if the momentum turns out to be a stop-run or is backed by genuine buying, which should push the GBP/USD pair further towards the key 1.30 psychological mark.
Technical levels to watch