GBP/USD sits near session tops, just above 1.3100 mark

• GBP/USD regained some positive traction on Tuesday amid renewed USD selling bias.
• The upbeat market mood undermined the safe-haven USD and remained supportive.
• Brexit uncertainties might cap the upside ahead of the Jackson Hole Symposium.

The GBP/USD pair held on to its daily gains near session tops, with bulls looking to build on the momentum further beyond the 1.3100 round-figure mark.

Following the previous day's sharp intraday pullback of around 100 pips, the pair managed to regain some positive traction on Tuesday amid the emergence of some fresh selling around the US dollar. The optimism over a potential vaccine and treatment for the highly contagious disease remained supportive of the upbeat market mood. This, in turn, undermined the greenback's relative safe-haven status and was seen as a key factor that extended some support to the major.

It is worth recalling that the Trump administration was reportedly considering fast-tracking an experimental COVID-19 vaccine being developed by AstraZeneca and Oxford University for use in the United States ahead of the November 3 elections. Adding to this, the US Food and Drug Administration (FDA) said on Sunday that it has issued emergency authorization to use convalescent plasma to treat certain patients suffering from the COVID-19 virus.

The market sentiment got an additional boost after the US Trade Representative’s Office said in a statement that both the US and China see progress made on resolving issues in the phase one trade deal between the two countries. The risk-on flow was reinforced by a goodish pickup in the US Treasury bond yields, which did little to impress the USD bulls. However, Brexit uncertainty might collaborate towards capping the upside for the GBP/USD pair.

Investors might also be reluctant to place any aggressive bets ahead of the Fed Chair Jerome Powell's speech at the Jackson Hole Symposium later this week. This makes it prudent to wait for some strong follow-through buying before traders start positioning for any further intraday appreciating move for the GBP/USD pair amid absent relevant market moving economic releases from the UK.

Market participants now look forward to the US economic docket, highlighting the release of the Conference Board's Consumer Confidence Index. The data might influence the USD price dynamics and produce some short-term trading opportunities later during the early North American session, though the market reaction is more likely to be muted.

Technical levels to watch