The GBP/USD pair gained some fresh traction on Thursday and jumped back above the 1.2900 handle to refresh multi-month tops.
Spot built on to previous session’s up-move from 1.2800 neighborhood and traded in positive territory for the third consecutive session, primarily led by the positive sentiment surrounding the British Pound in wake of last week’s announcement by the UK PM Theresa May.
Meanwhile, a fresh wave of the US Dollar selling pressure, against the backdrop of disappointment from the US President Donald Trump’s tax reform plan and comments on NAFTA, helped the pair to break out of the 6-day old trading range and lift it to the highest level since early October 2016.
The pair, however, struggled to build on to the momentum and quickly retreated around 25-30 pips to move back below the 1.2900 handle.
Investors now look forward to the ECB monetary policy decision, which is likely to have a significant impact on the greenback and might thus, provide some fresh impetus.
Later during the NA session, the US economic docket that includes – durable goods orders, weekly jobless claims and pending home sales data, would also be looked upon for some short-term trading opportunities.
Technical levels to watch
Given that the pair already seems to have confirmed a bullish breakout, any further retracement below 1.2885 level now seems to find support at previous resistance near 1.2860-50 region. Failure to defend this immediate support might dent bullish sentiment and could drag the pair back towards the 1.2800 handle.
On the upside, a follow through buying interest beyond 1.2915-20 band should continue boosting the pair further towards 1.2960-70 horizontal resistance en-route the key 1.30 psychological mark.