GBP/USD remains capped below 1.40 handle ahead of Powell’s testimony

   •  A modest USD uptick prompts some fresh selling.
   •  Traders seemed reluctant to place aggressive bets.
   •  US macro data/Powell’s testimony eyed for fresh direction.

The GBP/USD pair quickly reversed a bullish spike to the 1.40 neighborhood and dropped to fresh session lows in the last hour, albeit recovered few pips thereafter. 

The pair broke out of its Asian session consolidative trading range and touched an intraday high level of 1.3996 amid a mildly softer tone surrounding the US Dollar. However, a goodish pickup in the US Treasury bond yields, which extended some support to the greenback, prompted some fresh selling at higher levels and kept a lid on any further up-move. 

Meanwhile, the market seems to have largely ignored some positive comments by the French President Emmanuel Macron, who was noted saying that a customs union agreement with the UK is possible post-Brexit, with the USD price dynamics acting as a key determinant of the pair's momentum on Tuesday. 

Further downside, however, remained cushioned as traders seemed reluctant to place any aggressive bets ahead of the Fed Chair Jerome Powell's first congressional testimony before the House Financial Services Committee, scheduled later in the day. 

Apart from the key event, important US macroeconomic releases - durable goods orders data and CB's consumer confidence index would also be looked upon to grab some short-term momentum play. 

Technical levels to watch

Immediate support is pegged near the 1.3920-15 region, which if broken might now drag the pair below the 1.3900 handle towards its next support near the 1.3830-25 horizontal zone. On the upside, bulls would be eyeing for a clear breakthrough the 1.40 handle, above which the pair is likely to aim towards testing a short-term descending trend-line resistance, currently near the 1.4055-60 region.