GBP/USD recovers to 1.2800 mark as USD selling pressure remains unabated

The GBP/USD pair extended post UK jobs data recovery move and has now jumped to fresh session tops, just above the 1.2800 handle.

A broad based US Dollar sell-off, led by disappointing retail sales data and easing inflationary pressure, helped the pair to recovery sharply from session lows near 1.2725 touched in the aftermath of weaker UK earnings growth data released earlier during European session. 

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Plunging US treasury bond yields clearly points to market expectations that the Fed is likely to sound more cautious and refrain from opting for faster rate-tightening cycle. Hence, a follow through greenback selling interest, leading to additional recovery for the major remains a distinct possibility. 

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Investor, however, are likely to hold back from initiating aggressive positions and the pair could possibly enter a consolidative phase ahead of the actual announcement.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The 4 hours chart shows that the price has met buying interest around a marginally bullish 20 SMA, whilst technical indicators have turned north, but remain within neutral territory. Market is all about the Fed and the dollar today, and upcoming direction will depend on the US Central Bank decision, and how the market reads it."