- GBP / USD regains positive traction on Tuesday and builds on the previous day’s rebound.
- Market optimism weighs on the safe-haven USD and supports the pair’s upward move.
- The rally in US bond yields helps limit the USD’s losses and limits the pair’s gains.
The pair GBP/USD moves higher at the start of the American session on Tuesday, holding steady near the upper end of its daily trading range around the 1.3615-20 region.
The pair has built on the previous day’s intraday bounce of around 80 pips and gained some traction during the first half of Tuesday’s trading action. The rebound has been seen supported by the emergence of some selling around the US dollar, although it lacks a strong bullish conviction.
He optimistic mood The prevailing market, as shown by positive trade sentiment in the stock markets, has sparked some profit-taking around the safe-haven USD. The already optimistic market sentiment has received an additional boost amid the growing likelihood of additional fiscal stimulus measures in the United States.
The market has been assessing the prospects for more aggressive fiscal spending in 2021 under the presidency of Joe Biden. Expectations rose further after news reports indicated that the US Treasury candidate, Janet Yellen will urge lawmakers to act big to avoid a prolonged recession.
In the context of expectations of increased government indebtedness, the monetary flow of risk appetite has provoked a new boost in US Treasury yields. This, in turn, could help limit USD losses. and limit any uncontrolled bullish movement of the GBP / USD pair, at least for now.
Apart from this, the imposition of additional travel restrictions in the UK it has prevented GBP bulls from opening aggressive positions. This makes it prudent to wait for some solid continuation buying before positioning for any further short-term bullish movement for the GBP / USD pair.
In the absence of major economic releases, the key focus on Tuesday will be on Janet’s confirmation hearing before the Senate Finance Committee. This, coupled with the broader market risk sentiment, could influence USD price dynamics and generate some opportunities around GBP / USD.
GBP / USD technical levels
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