GBP/USD spikes back to 1.2200 handle, closer to session tops
- Cross-driven strength helped offset a goodish pickup in the USD demand.
- Persistent fears of a no-deal Brexit likely to keep a lid on any strong rally.
- Technical set-up (flag chart pattern) remains in favour of bearish traders.
The GBP/USD pair rallied over 40-pips during the early North-American session and jumped to the 1.2200 handle, back closer to the top end of its daily trading range.
After the previous session's directionless move, the pair managed to regain some positive traction on Tuesday and the up-move seemed rather unaffected by a pickup in the US Dollar demand - supported by a solid rebound in the US Treasury bond yields.
Meanwhile, the latest leg of a sudden upsurge over the past hour or so lacked any obvious fundamental catalyst and could be solely attributed to some cross-driven strength, stemming out of a sharp intraday corrective slide in the EUR/GBP cross.
However, persistent Brexit-related uncertainties might continue to hold investors from placing any aggressive bullish bets and keep a lid on any runaway rally for the major amid absent relevant market moving economic releases from the UK or the US.
Even from a technical perspective, the pair has been oscillating within a short-term descending trend-channel formation on the 1-hourly chart. Given the recent slump, the mentioned channel constituted towards the formation of a bearish continuation - flag chart pattern.
Hence, it remains prudent to wait for a strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term and positioning for any further recovery, possibly towards reclaiming the 1.2300 round figure mark.
Technical levels to watch