GBP/USD holds steady above mid-1.3100s, lacks follow-through
- GBP/USD edged higher and refreshed daily tops during the early European session.
- The uptick could be solely attributed to some technical buying above 100-hour SMA.
- A softer risk tone, positive US bond yields might underpin the USD and cap the upside.
The GBP/USD pair rallied around 40 pips from the early European session lows and refreshed daily tops, around the 1.3165 region in the last hour, albeit lacked follow-through.
Following a brief consolidation through the first half of the trading action on Wednesday, the pair regained some traction and was now looking to build on the previous day's strong positive move. Given the overnight sustained strength above 100-hour SMA, the uptick could be solely attributed to some technical buying amid a subdued US dollar price action.
The USD struggled to attract any meaningful buying despite the ongoing upsurge in the US Treasury bond yields. That said, a slight deterioration in the global risk sentiment extended some support to the greenback's relative safe-haven demand. This, in turn, might keep a lid on any further gains for the GBP/USD pair, at least for the time being.
Investors might also be reluctant to place any aggressive directional bets ahead of the Fed Chair Jerome Powell's speech on Thursday at the Jackson Hole Symposium. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move amid absent relevant market moving economic releases from the UK.
Meanwhile, the US economic docket highlights the release of Durable Goods Orders for July. The data might influence the USD price dynamics. This, along with the broader market risk sentiment will be looked upon for some short-term trading opportunities later during the early North American session.
Technical levels to watch