The GBP/USD pair trimmed a part of its early strong gains and has now retreated around 35 pips from the 1.3145 area or the highest level since March 9. The pair prolonged its recent strong bullish momentum witnessed over the five weeks or so and built on the gains further beyond the 1.3100 mark amid the heavily offered tone surrounding the US dollar. However, extremely overbought conditions on short-term charts held investors from placing fresh bullish bets and led to a range-bound price action during the early part of the European session.
Given the GBP/USD pair's strong rally of nearly 900 pips from late June swing lows, around the 1.2260-55 region, investors now seemed inclined to take some profits off the table. This, in turn, was seen as the only factor behind the pair's modest intraday pullback, though any subsequent slide might still be seen as a buying opportunity and is more likely to remain limited.