After an initial dip to 1.2930 region during early European session, the GBP/USD pair attracted fresh buying interest and refreshed session tops in the past hour.
The pair, however, lacked follow through momentum and retreated from highs, albeit continued holding with minor gains around mid-1.2900s. The sentiment around the British Pound remains positive especially after the latest British Retail Consortium Like-for-like Sales data for April 2017 added to last week’s stronger PMI reports and reflected the British economy’s resilience despite of lingering concerns over Brexit.
However, with market participants remain convinced that the Fed would eventually move towards raising rates at its June meeting. Hence, continuous rise in the US treasury bond yields underpinned the US Dollar demand and seems to collaborate towards keeping a lid on the pair’s near-term up-move.
With yet another extremely light economic docket, broader sentiment surrounding the greenback and bond yield dynamics would continue to act as key determinants of the pair’s movement through European session on Tuesday.
Carol Harmer, Founder charmertradingacademy.com writes, “divergence on the indicators…but we have oversold conditions on the 1|H and 4H which may see a small move higher first…where will we go to….well…1.2965/70 would be an ideal place to go short…we leave stop/reverse above the target area of 1.3015 which I stated last week….”
“Now only if we break and hold above 1.3015 would the short term picture alter…If done then we are looking at my 2nd target which is 13135…” she added.