GBP/USD Forecast: Sustained Move Above 1.3230 Might Negate Near-term Bearish Bias

The British Pound outperformed its major counterparts on Monday amid some renewed optimism over Brexit developments. Speaking at the CBI conference in London, the UK PM Theresa May backed a deal in a transitional period and said that she wants to reach a detailed agreement on this period as early as possible. Adding to this, a modest US Dollar provided an additional boost, pushing the GBP/USD pair back above the mid-1.3100s and recovering over 50% of the last week's selloff triggered by the dovish BoE rate hike.

On Tuesday, the NIESR GDP estimate for the three months to October could influence the British Pound and provide some short-term trading impetus. Later during the NY trading session, the current Fed Chair Janet Yellen is scheduled to deliver acceptance remarks in Washington and could also drive the pair on Tuesday.

From a technical perspective, the ongoing short-covering bounce could get extended towards the 1.3200 round figure mark en-route to the 1.3225-30 heavy supply zone. Some follow-through buying interest would negate any near-term bearish bias and assist the pair to make a fresh attempt and conquer the 1.3300 handle.

Conversely, any retracement from higher levels might now find immediate support near the 1.3155-50 region, which if broken would turn the pair vulnerable to head challenge the 1.3100 handle before eventually dropping to test a short-term descending trend-line support, currently near the 1.3030 region.