GBP/USD surges to 1-week tops, closer to 1.30 handle amid notable USD supply

   •  A fresh wave of USD selling helped catch some aggressive bids on Tuesday.
   •  Technical buying above 200-hour SMA further accelerates the positive move.
   •  Investors now eye US economic data for some short-term trading impetus.

The GBP/USD pair spiked to one-week tops in the last hour, with bulls now eyeing a follow-through up-move beyond the key 1.30 psychological mark.

The pair built on its recent bounce from over two-month lows and traded with a positive bias for the third consecutive session. The positive momentum picked up the pace since the early European session on Tuesday and was supported by a fresh wave of US Dollar selling pressure.

The greenback held on the defensive rather lost some additional ground amid concerns over steadily cooling US inflation, which reaffirmed market expectations that the Fed will stick to its cautious stance when it announces its latest monetary policy decision on Wednesday.

Apart from the prevalent USD selling bias, the momentum lacked any obvious fundamental catalyst and hence, the latest leg of a sudden spike over the past few hours could further be attributed to some intraday short-covering move on a sustained move beyond 200-hour SMA.

It would now be interesting to see if the upsurge is backed by genuine buying or turns out to be a stop run as investors still await any fresh update/at least some positive developments from the ongoing UK cross-party Brexit talks.

In absence of any major market moving economic releases from the UK, traders now look to the US economic docket - featuring the release of pending home sales, the Conference Board's consumer confidence index and Chicago PMI, in order to grab some short-term trading opportunities.

Technical levels to watch