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GBP/USD: Attempted recovery fails ahead of 1.2500 handle, Powell’s testimony/FOMC minutes eyed

  • Early uptick turns out to be short-lived amid Brexit uncertainties/dovish BoE expectations.
  • Surging US bond yields help limit a modest USD pullback and collaborate towards capping.
  • Investors’ focus remains on the Fed Chair Jerome Powell’s testimony and FOMC minutes.

The GBP/USD pair failed to capitalize on its early uptick to the 1.2500 and quickly retreated over 30-pips in the last hour.

With investors looking past Wednesday’s UK macro releases, persistent uncertainty around Brexit and speculations that the BoE might join other major central banks to ease monetary policy kept a lid on the pair’s intraday uptick. 

Meanwhile, a strong follow-through upsurge in the US Treasury bond yields – supported by tempered Fed rate cut expectations, helped limit a modest US Dollar pullback from multi-month tops and further collaborated towards capping gains.

Hence, the key focus will remain on the Fed Chair Jerome Powell’s two-day congressional testimony, starting this Wednesday. This coupled with the release of June FOMC meeting minutes will influence the USD price dynamics and produce some short-term trading opportunities later during the North-American session.

Technical levels to watch

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