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GBP/USD fades an intraday bullish spike to 1-month tops, back below mid-1.2700s

  • Fears of a no-deal Brexit kept a lid on the attempted move beyond 1.2760 supply zone.
  • A modest USD rebound from multi-month lows prompts some fresh selling at higher levels.
  • Traders now eye US economic data and Powell’s scheduled speech for some fresh impetus.

The GBP/USD pair faded an intraday bullish spike to one-month tops and dropped to fresh session lows in the last hour, albeit recovered few pips thereafter.

The post-FOMC US Dollar selling pressure remained unabated through the early part of Tuesday's trading session and was seen as one of the key factors that assisted the pair to build on its recent recovery move from the vicinity of the key 1.2500 psychological mark.

The intraday positive momentum took along some short-term trading stops being placed near the 1.2760 heavy supply zone, albeit lacked any strong follow-through after the favourite UK PM candidate Boris Johnson reiterated his plans to leave the EU by October 31.

Speaking to LBC radio, Johnson further added that the current Brexit deal is basically dead and it would be bizarre if the EU decides to impose tariffs on UK goods. The comments continued fueling fears of a no-deal Brexit and held investors from placing aggressive bullish bets.

The pair started losing positive momentum, rather met with some fresh supply at higher levels and was further pressurized by a modest USD rebound from multi-month lows, possibly led by some short-covering ahead of the Fed Chair Jerome Powell's scheduled speech later this Tuesday.

Ahead of the key event risk, traders will look forward to the US economic docket - featuring the release of Conference Board's Consumer Confidence Index, Richmond Manufacturing Index and new home sales data, for some short-term opportunities.

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