GBP/USD climbs back above mid-1.2400s, refreshes daily high amid broad-based USD weakness

• GBP/USD catches fresh bids on Wednesday and reverses a major part of the overnight downfall.
• The emergence of fresh selling around the USD is seen as a key factor pushing the pair higher.
• Traders now look forward to the US Durable Goods Orders data for short-term opportunities.

The GBP/USD pair regains positive traction on Wednesday and reverses a major part of the previous day's retracement slide from over a one-week high - levels just above the 1.2500 psychological mark. Spot prices build on the steady intraday ascent through the early part of the European session and currently trade around the 1.2455-1.2460 region, up over 0.40% for the day.

The US Dollar (USD) struggles to capitalize on the overnight strong move up and comes under renewed selling pressure, which, in turn, is seen as a key factor pushing the GBP/USD pair. Fresh concerns about the regional banking sector crisis, the possibility of an imminent recession and worries about the US debt ceiling lift bets for an imminent rate cut by the Federal Reserve (Fed) later this year. This, in turn, led to the overnight steep decline in longer-duration US Treasury bond yields and continues to weigh on the Greenback.

Apart from this, a modest recovery in the US equity exerts additional downward pressure on the safe-haven buck and remains supportive of the GBP/USD pair's intraday positive move. The British Pound further seems to draw support from expectations for another 25 bps interest rate hike by the Bank of England (BoE) in May. The bets were lifted by last week's release of stronger UK wage growth data and consumer inflation figures, which, in turn, favours bulls and supports prospects for a further intraday appreciating move for the major.

In the absence of any relevant market-moving macro data from the UK, traders now look to the US economic docket, featuring the release of Durable Goods Orders data later during the early North American session. The focus, however, will remain glued to the Advance US Q1 GDP report on Thursday and the US Core PCE Price Index - the Fed's preferred inflation gauge on Friday. This will play a key role in influencing the near-term USD price dynamics and help determine the next leg of a directional move for the GBP/USD pair.

Technical levels to watch