GBP/USD slips back below 1.28 handle

The GBP/USD pair struggled to build on the French election-led early momentum and continues to face some fresh supply on every attempted move towards mid-1.2800s. 

Currently trading around 1.2790 level, within striking distance of session lows, the pair's retracement from higher level could be attributed to a sharp rally in the US treasury bond yields. Renewed optimism over the US President Donald Trump's tax reform plans, due to be announced later this week, lifted the US treasury bond yields across all maturities. Rising bond yields helped the key US Dollar Index to bounce off multi-week lows and was seen weighing on the major. 

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However, with sentiment around the British Pound turning positive, against the backdrop of last week's announcement by the UK PM Theresa May to call for a snap election in June, it would be interesting to see it the pair is able to hold the four-day old consolidative trading range.

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In absence of any major market moving economic releases, either from UK or from the US, the pair remains at the mercy of US treasury bond yield dynamics.

Technical levels to watch

A follow through retracement below 1.2770-60 area is likely to pave way for additional corrective slide towards 1.2730 intermediate support ahead of the 1.2700 handle.

On the upside, sustained break through 1.2840-50 immediate hurdle is likely to assist the pair back towards reclaiming the 1.2900 handle before eventually lifting it further towards its next barrier near 1.2955-60 region.