GBP/USD spikes to 1-1/2 week tops, around mid-1.4100s on fresh USD supply

   •  USD fails to build on early up-move despite resurgent US bond yields.
   •  Technical buying, above 1.4120 level, provides an additional boost. 
   •  Follow-through buying needed to confirm further appreciation.

The GBP/USD pair finally broke out of its European session consolidation phase and jumped to 1-1/2 week tops in the past hour, albeit retreated few pips thereafter.

Despite a strong follow-through uptick in the US Treasury bond yields and easing US-China trade fears, the US Dollar failed to preserve early gains and was seen as one of the key factors driving the pair higher.

This coupled with possibilities of some short-term trading stops being triggered on a move beyond the 1.4115-20 region, European session swing highs, could also be one of the factors behind the latest leg of sharp uptick over the past hour or so.

The up-move, however, wasn't backed by any major fundamental trigger and thus, lacked any strong conviction. Hence, it would be prudent to wait for a follow-through buying interest before positioning for any further near-term gains.

Technical levels to watch

A follow-through buying interest has the potential to continue lifting the pair further towards reclaiming the 1.4200 handle en-route 1.4225-30 supply zone. On the flip side, 1.4120-15 area now seems to protect the immediate downside, which if broken could drag the pair back towards 1.4065-60 horizontal support.