GBP/USD stalls sharp reversal from 1.30 neighborhood, back above mid-1.2900s

Having faded early European session bullish spike closer to the key 1.30 psychological mark, the GBP/USD pair turned sharply lower and retreated over 50-pips from session tops.

Currently trading around mid-1.2900s, just a few pips away from session low of 1.2936 touched in the past hour, a sharp US Dollar recovery, despite of tumbling US treasury bond yields, turned out to be a key factor behind the pair's sharp reversal. 

Moreover, traders also seems to have used the up-move, back closer to yearly tops reached on Monday, as an opportunity to lighten their bullish bets ahead of Thursday's big event risk - BOE monetary policy decision and quarterly inflation report. 

Despite of the pull-back, the pair has managed to hold on minor gains amid upbeat sentiment surrounding the British Pound, against the backdrop of recent slew of stronger UK macro data. 

Next on tap would be the release of US import prices and Fedspeaks, which would be looked upon for some short-term trading opportunities. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "more range trading could be expected, as the pair maintains the neutral stance in its 4 hour chart, with technical indicators heading nowhere around their mid-lines and the price still unable to move far from a horizontal 20 SMA. Below 1.2930, the pair can extend its slide towards the 1.2890 region, while below this last, the next strong support comes at 1.2830."

"Approaches to 1.3000 are still seen as selling opportunities, although large stops should lie above it, and if those get triggered, the advance can extend up to 1.3060"