GBP/USD climbs further beyond 1.3900 mark, fresh session tops
- GBP/USD gained traction for the second straight session on Monday amid sustained USD selling.
- COVID-19 jitters, an uptick in the US bond yields allowed the USD to rebound from multi-week lows.
- Investors now look forward to the US Durable Goods Orders for sine meaningful trading impetus.
The GBP/USD pair maintained its bid tone through the early European session and refreshed daily tops, around the 1.3920-25 region in the last hour.
The US dollar selling bias remained unabated through the first half of the trading action on Monday amid expectations that the Fed will keep interest rates near zero levels for a longer period. This, in turn, was seen as a key factor that assisted the GBP/USD pair to build on Friday's positive move and gain strong traction for the second consecutive session.
Apart from this, the underlying bullish sentiment in the equity markets further undermined the greenback's relative safe-haven status against its counterpart. That said, concerns that surging COVID-19 cases in some countries could derail the global economic recovery from the pandemic helped limit any further losses for the USD, at least for the time being.
Meanwhile, the incoming US macro data remained supportive of the narrative for a relatively faster US economic recovery from the pandemic. This, along with a modest pickup in the US Treasury bond yields, allowed the USD Index to rebound from multi-week lows. This might keep a lid on any further gains for the GBP/USD pair, warranting some caution for aggressive bullish traders.
There isn't any major market-moving economic data due for release from the UK. The US economic docket highlights the release of Durable Goods Orders later during the early North American session. This, along with the US bond yields and the broader market risk sentiment, might influence the USD price dynamics and produce some short-term trading opportunities around the GBP/USD pair.
Technical levels to watch