GBP/USD fades a bullish spike, dips back below 1.3100 handle

The GBP/USD pair ran through fresh offers at higher level at 1.3121 and has now retraced back to currently trade marginally below 1.3100 handle.

During early European session on Monday, a bout of short-covering helped the pair to recover from an early weekly gap down opening. However, upbeat sentiment surrounding the greenback, on renewed speculations of an eventual Fed rate-hike action in 2016, capped further up-move and dragged the major back below 1.3100 round figure mark.

This week's key macro releases from the US, which includes - durable goods orders and second estimate of Q2 2016 GDP, would provide fresh impetus ahead of the Fed Chair Janet Yellen's speech at the Jackson Hole Symposium, which would determine the near-term direction for the US Dollar.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "Technically, the 4 hours chart shows that the price is back above its 20 SMA that anyway lacks directional strength and stands around 1.3085, providing a short term support, whilst the technical indicators are bouncing from their mid-lines, presenting bullish slopes within positive territory and suggesting the pair may recover further."

"The pair has traded as high as 1.3120, which means that an upward acceleration above it can take the pair up to the 1.3160 price zone, while further gains beyond this last should see the price approaching 1.3100."

"Below 1.3085, the pair can fell back to the mentioned daily low, but buying interest will likely surge on approaches to this last."