• Fresh USD selling helps reverse an early dip to sub-1.3100 level.
• Cross-driven strength provides an additional boost in the last hour.
• The up-move lacked any follow-through amid absent fundamental trigger.
The GBP/USD pair quickly reversed an early European session dip to sub-1.3100 level and rallied around 55-pips in the last hour.
The latest leg of a sharp spike to an intraday high level of 1.3152 lacked any obvious fundamental catalyst and could be primarily attributed to some fresh US Dollar selling. Despite the ongoing upsurge in the US Treasury bond yields, the greenback failed to gain any traction and was seen as one of the key factors driving the pair higher.
The upsurge could further be attributed to some cross-driven strength stemming out of a sudden fall in the EUR/GBP cross following the ECB Chief Economist Peter Praet's comments, saying that it will take months before higher wages impact inflation.
The bullish move already seems to have run out of steam, with the pair quickly retreating over 20-pips to currently trade with only modest daily gains near the 1.3130 region.
In absence of any major market moving economic data from the UK, traders are likely to take cues from the BoE MPC External Member Gertjan Vlieghe's scheduled speech. Later during the early North-American session, the US consumer confidence index will also be looked upon for some short-term trading opportunities.
Technical levels to watch
The 1.3150 region (100-day SMA) might continue to act as an immediate resistance, above which the pair is likely to aim towards reclaiming the 1.3200 handle. On the flip side, the 1.3100 area might continue to protect the immediate downside, which if broken is likely to accelerate the fall towards 1.3055 support area.
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