GBP/USD holds within daily trading range around 1.29 handle

The GBP/USD pair struggled for a firm direction and seesawed between tepid gains/minor losses around the 1.2900 handle, currently place at the top end of daily trading range around 1.2910-15 band.

After yesterday's sharp retracement from multi-day tops near mid-1.2900s, and a subsequent drop to 1.2870 region, the pair now seems to have entered a consolidation phase and oscillated within 30-35 pips broader trading range. 

Even a sharp greenback recovery, with the key US Dollar Index inching back closer to the 97.00 handle, failed to provide any fresh impetus, with political uncertainty, ahead of the UK general election on Thursday, holding investors back from initiating any fresh bets.

   •  UK: Election Day approaching - Rabobank

With the recent polls suggesting that the Tories might lose their absolute majority, possibilities of a hung parliament might continue to keep a lid on any sharp up-move for the major. Even an outright majority for the Tories might resurface ‘hard Brexit’ worries and hence, the post-election bounce could turn out to be short-lived. 

   •  Pound seen the biggest loser if UK vote delivers no winner - BBG

From the US, former FBI director Comey's testimony on Thursday would influence the greenback and also collaborate towards determining the pair's near-term direction. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the 4 hours chart shows that the price keeps holding above a bullish 20 SMA, while indicators head north above their mid-lines, supporting an extension towards the 1.2950/60 region, the immediate resistance. Above it, the pair can extend towards 1.3000, but selling interest around this last should remain strong."

"Below 1.2880, the next short term supports come at 1.2840 and 1.2800, with a break below this last highly unlikely for today" she added.