GBP/USD clings to gains above 1.34 handle, will it sustain?

The GBP/USD pair extended its recovery move from 2-week lows and touched a fresh session high level of 1.3442 during early NA session, albeit quickly retreated few pips thereafter.

The US Dollar bulls seemed unimpressed by a slight upward revision of the US Q2 GDP print, coming in at 3.1%, much higher than 1.2% growth recorded in Q1. The final revision of GDP growth numbers, to some extent, seems to have been negated by larger than expected rise in weekly jobless claims, and wholesale inventories. 

Apart from a modest greenback retracement, prompting some short-covering, the pair's recovery of nearly 100-pips from session lows lacked any major fundamental trigger. And against the backdrop of recent hawkish rhetoric by the Federal Reserve and optimism over the US President Donald Trump's tax reforms, the up-move runs the risk of reversing its course. 

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Traders now look forward to speeches by FOMC’s members Fischer, George and Bostic for some fresh impetus trading impetus. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The strong recovery is not yet confirming further gains ahead, as in the 4 hours chart, the price is battling around a bearish 20 SMA, whilst technical indicators maintain a moderate upward potential within bearish territory. The pair will need to extend beyond 1.3460 now, the 38.2% retracement of the same rally, to look upward constructive during the US session, with room then to retest the 1.3500/30 price zone."