GBP/USD trying to defend 1.2950 support, upside remains capped at 1.30 handle

The GBP/USD pair once again failed ahead of the key 1.30 psychological mark and refreshed session low during early NA session before quickly recovering to 1.2965-60 band.

Persistent US Dollar buying interest, always backed by increasing odds for an eventual Fed rate-hike action, has been the key factor weighing on the major. Friday's mixed US jobs report, revealing a deceleration in earnings growth during April, wasn't bad enough to dent market expectations for a June Fed rate-hike and remained supportive for the prevalent bullish sentiment surrounding the US Dollar. 

Meanwhile, a slight deterioration in investors' risk-appetite, as depicted by negative trading sentiment surrounding European equity market and further reaffirmed by a slide in the US treasury bond yields, was also seen boosting the buck's safe-haven appeal against its British counterpart. 

Market seems to have largely ignored slightly dovish comments by St. Louis Fed President James Bullard comments, who advocated keeping the Fed fund target rate between 0.75%-1.00% until it becomes evident that the economy has shifted gears.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "the pair is poised to trade range bound, with scope to test 1.2900 in the case of a downward correction, without actually affecting the dominant bullish trend."

"Technical readings in the 4 hours chart show that the risk remains towards the upside, as the price holds well above a flat 20 SMA, whilst the Momentum stands within positive territory, although lacking directional strength. The RSI indicator heads lower, but around 57, not enough to suggest a bearish extension. The daily low is 1.2948, with a break below it favoring a decline towards 1.2900. The pair needs to accelerate through 1.3000 on the other hand, to be able to regain its upward strength, with 1.3040/60 as the immediate target zone" she added.