GBP/USD: Strength In USD Poses May Keep Upside Limited

The spike post-BoE has broken above the most pronounced downward trendline, helping to alleviate the technical bear-side pressure, even if the appreciation in the GBP failed to find acceptance above the level of resistance at 1.2975–80. Those filled long on the breakout came to an unpleasant bull trap realization as the 1.30 psychological level snapped the price right back down as ample pockets of supply remain present (the hourly pin is a testament). Nonetheless, the breach of the most recent high allows for a slightly more constructive outlook, with buyers now expected to take control of 1.2930 horizontal support (potential inverted H&S) in order to keep making progress, with the real inflection point a recovery above the 1.30 round number. Should sellers find equilibrium sub the mentioned level, 1.29–1.2890 would be the next logical target for the sellers ahead of 1.2855–60 (yesterday’s low). Cross-referencing correlated asset classes (DXY, UK-US 5y bond yield spread) I still can’t envision how GBP gains enough fortitude, knowing how tightly correlated the pair has been to both instruments as of late. The unpredictable Brexit landscape is yet another concern weighing.