GBP/USD pushes above 1.29 on greenback weakness

The GBP/USD pair gained traction in the NA session and rose above the 1.29 handle to refresh its session peak at 1.2911. As of writing, the pair was trading at 1.2904, losing 0.2% on the day.

A recent USD sell-off amid the falling U.S. Treasury-bond yields seems to be lifting the pair higher on Monday. Investors continue to stay away from riskier assets at the beginning of the week, increasing the demand for safe-havens like the U.S. T-bonds. At the moment, the yield for the 10-year reference is losing 0.4% at 2.185% while the US Dollar Index is testing the 93 mark, down 0.4% on the day. The risk aversion is also reflected upon Wall Street with the Dow Jones Industrial Average and the S&P 500 dropping 0.15% and 0.2% respectively.

• US Dollar weaker, holding on to 93.00

The market sentiment could remain as the primary driver of the price action in the FX markets as the economic calendar won't be featuring any significant data on Tuesday either. The only noteworthy data from the U.K. will be the CBI Industrial Trends Survey, which is expected remain unchanged at 10 on a monthly basis in August.

In the meantime, in a published position paper on Monday, the U.K. said that both the U.K. and the rest of the EU would benefit from the close and longstanding trading relationship for goods and added that the views of business and consumers must be at the heart of the Brexit negotiations.

Technical outlook

The RSI on the daily graph is inching higher towards the 50 handle, suggesting that bears are losing strength. 1.2925 (100-DMA) could be seen as the first technical resistance ahead of 1.2985 (50-DMA) and 1.3030 (Aug. 11 high). On the downside, supports are located at 1.2850 (daily low), 1.2810 (Jul. 12 low) and 1.2705/00 (Jun. 26 low/psychological level).

• GBP/USD bearish below 1.3031/49 – Commerzbank