GBP/USD remains on the defensive around 1.1600 amid modest USD uptick, ahead of US GDP

• GBP/USD eases from a fresh multi-week high amid a modest USD recovery on Thursday.
• Reduced bets for more aggressive Fed rate hikes could act as a headwind for the buck.
• The fundamental backdrop supports prospects for the emergence of some dip-buying.

The GBP/USD pair fails to capitalize on the overnight breakout momentum beyond the 1.1500 psychological mark and retreats from its highest level since September 13 touched earlier this Thursday. The pair remains on the defensive through the early European session and is seen flirting with the 1.1600 round figure.

An intraday uptick in the US Treasury bond yields assists the US dollar to recover from over a one-month low, which, in turn, acts as a headwind for the GBP/USD pair. That said, speculations that the Federal Reserve might soften its hawkish stance - amid signs of a slowdown in the US economy - might hold back the USD bulls from placing aggressive bets. Adding to this, a generally positive tone around the equity markets could cap the safe-haven buck and continue lending some support to the major.

The British pound, on the other hand, is underpinned by the appointment of the new UK Prime Minister Rishi Sunak. Market players see Sunak as someone who can bring stability to the recent volatile markets and keep the British economy stable. Sunak also pledged to fix mistakes by the Truss administration and lead the country out of the current economic crisis, boosting investors' confidence. This, in turn, supports prospects for a further near-term appreciating move for the GBP/USD pair.

Even from a technical perspective, the overnight sustained break through the 1.1475-1.1480 supply zone and the 1.1500 mark adds credence to the positive outlook. Hence, any meaningful corrective slide might now be seen as a buying opportunity and remain limited, at least for the time being. Traders now look forward to the Advance US Q3 GDP report for a fresh impetus. Thursday's US economic docket also features the release of Durable Goods Orders and Weekly Initial Jobless Claims.

Technical levels to watch