GBP/USD now extends its recovery further north of the 1.2900 barrier to levels last traded in early November, always against the backdrop of the deep sell-off in the Greenback amid tariff jitters and recession fears.
GBP/USD remains in the upper half of the ascending regression channel and the Relative Strength Index holds above 60 after declining toward 50 on Monday, reflecting the bullish stance. On the upside, 1.2975 (upper limit of the ascending channel) aligns as a strong resistance level ahead of 1.3000 (round level, static level) and 1.3040 (static level).
Looking south, first support could be spotted at 1.2900 (static level, round level) before 1.2830 (mid-point of the ascending channel) and 1.2800 (200-day Simple Moving Average).
Fundamental Overview
GBP/USD failed to build on the previous week's impressive gains on Monday as safe-haven flows dominated the action in financial markets. After opening in negative territory, Wall Street's main indexes declined sharply, pressured by escalating fears over an economic downturn in the US. On Sunday, US President Donald Trump acknowledged that there will be a "period of transition" when asked whether his policy changes could potentially cause a recession.
The US economic calendar will feature NFIB Business Optimism Index for February and JOLTS Job Openings data for January on Tuesday. Meanwhile, investors will remain focused on the action in stock markets.
The UK's FTSE 100 Index trades virtually unchanged in the European morning. In the meantime, US stock index futures were last seen rising between 0.4% and 0.6%. In case there is a noticeable improvement in risk mood in the second half of the day, GBP/USD could continue to stretch higher.
On Wednesday, the US Bureau of Labor Statistics will publish Consumer Price Index (CPI) data for February.
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