GBP/USD surges to 1.3700 neighborhood and retreats

The GBP/USD pair reversed the US data-led retracement slide and surged through 2017 yearly tops to fresh post-Brexit highs, closer to the 1.3700 handle.

The pair initially retreated to 1.3610 area amid reviving US Dollar demand following the release of slightly better-than-expected US core CPI print, which reaffirmed that the Fed would stick to its gradual monetary policy tightening cycle through 2018. 

The post-data dip was bought into and the pair surged nearly 80-pips on news reports that Dutch and Spanish finance ministers have agreed to work together to push for a Brexit deal that keeps Britain as close to the EU as possible. 

Meanwhile, the up-move now seems to have lost steam and the pair quickly retreated around 30-40 pips from session tops to currently trade back below mid-1.3600s.

Technical outlook

A convincing break through the 1.3700 handle would confirm a near-term bullish bias and pave the way for an extension of the pair upward trajectory towards the 1.3800 mark en-route mid-1.3800s.

On the flip side, the 1.3615-10 region might continue to act as immediate strong support, which if broken might prompt fresh profit-taking slide back towards 1.3535-30 zone en-route the 1.3500 handle.