GBP/USD tumbles to lows, below mid-1.2800s amid notable USD demand

The GBP/USD pair once again failed to sustain early up-move beyond the 1.2900 handle and came under some renewed selling pressure on Tuesday.

Currently placed at session lows, around mid-1.2800s, the pair has now reversed majority of yesterday's modest recovery gains from closer to 5-week lows touched on Friday. The pair's latest leg of downslide lacked any fundamental drivers and could be solely attributed to a broad-based US Dollar recovery. 

A sharp uptick in the US Treasury bond yields underpinned the greenback demand and has been one of the key factors weighing on the major through early European trading session on Tuesday. 

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Meanwhile, the sentiment around the British Pound remains weak, especially after the latest dovish BoE tilt, and the same is being reinforced by reemergence of selling pressure on every up-move beyond the 1.2900 handle. Hence, a follow through weakness below the 4-day old trading range support, near the 1.2840-30 region, now seems a distinct possibility.

In absence of any major market moving economic releases, the USD price dynamics would remain an exclusive driver of the pair's movement through Tuesday's trading session. The key focus, however, would remain on the Jackson Hole Symposium, where clues over the Fed's near-term monetary policy outlook would eventually help investors to determine the pair's near-term trajectory.

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Technical levels to watch

A follow through weakness below 1.2830 area (Thursday's low) is likely to accelerate the slide towards the 1.2800 handle en-route the next support near the 1.2755-50 horizontal zone. On the upside, any recovery attempts above the 1.2900 handle might continue to confront fresh supply near 1.2920 level, above which the pair is likely to aim towards reclaiming the key 1.30 psychological mark.