GBP/USD Forecast: Move Beyond 1.3230 Needed To Confirm Additional Gains

The GBP/USD pair had a good two-way move in the past 24-hours and now seems to have entered a consolidation phase, within a narrow trading range above mid-1.3100s. On Tuesday, the pair dropped to an intraday low level of 1.3109, amid strong US Dollar buying interest, but quickly rebounded on reports that Senate Republicans are considering to delay the implementation of the corporate tax cut by one year. Meanwhile, some positive developments over Brexit transitional deal extended some additional support to the British Pound and helped the pair to recover early lost ground.

Currently trading around the 1.3165 region, the pair seemed lacking any strong follow-through momentum as investors refrained from placing aggressive bets and preferred to wait for a fresh catalyst. In absence of any market moving economic releases, the focus would remain on any fresh Brexit news and progress over the US tax bill.

Technically, the pair is slowly losing its bullish momentum and slipping back to test 1.3130-25 immediate support, which is closely followed by the 1.3100 handle. A convincing break below the mentioned support would turn the pair vulnerable to head back toward retesting a short-term descending trendline support, currently near the 1.3030-25 region.

On the flip side, sustained momentum beyond the 1.3200 handle could extend toward the 1.3230 heavy supply zone, also nearing 50-day SMA, which, if conquered, might negate any near-term bearish bias and assist the pair to make a fresh attempt toward reclaiming the 1.3300 handle.