- The renewed selling bias around the USD pushes GBP / USD to new multi-year highs on Tuesday.
- Risk appetite and a pullback in US bond yields are putting some pressure on the USD.
- The sustained move above the 1.3755-60 region has set the stage for further gains.
The pair GBP/USD maintains its firm tone during the European session on Tuesday and now appears to have entered a bullish consolidation phase near multi-year highs, around the 1.3785 region.
The pair has built on the good bounce the day before, from the 1.3680 region, and gained strong continuation traction on Tuesday. Momentum has taken GBP / USD above the 1.3755-60 region and it is due to the appearance of some new sales around the US dollar.
USD bulls have gotten cautious, amid doubts about a relatively faster US economic recovery following the release of a rather unimpressive US jobs report on Friday. This, coupled with a modest pullback in US Treasury yields, has weighed on the dollar and provided a modest boost to the GBP / USD pair.
Meanwhile, progress on coronavirus vaccines and developments to accelerate the $ 1.9 trillion stimulus package proposed by the president of the United States, Joe Biden, have continued to support the underlying bullish sentiment in the markets. This has been seen as another factor that has further weighed on the USD safe haven demand.
With Tuesday’s positive move, the GBP / USD pair already appears to have confirmed a short-term bullish breakout and seems poised to extend positive momentum. A sustained move above the 1.3800 level will reaffirm the constructive setup and pave the way for a further short-term bullish move.
In the absence of major economic releases from either the UK or the US, USD price dynamics will play a key role in influencing the intraday movement of the GBP / USD pair. Investors could follow the signs of the broader market risk sentiment to seize some short-term opportunities.
GBP / USD technical levels
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