GBP/USD: relentless rally continues, now eyeing 1.42 mark

   •  USD remains under intense selling pressure.
   •  GBP supported by today’s upbeat jobs data.
   •  Ignores extreme overstretched conditions. 

The GBP/USD pair maintained its strong bid tone through the early NA session and jumped to the 1.4200 neighborhood in the last hour.

Comments from the US Treasury Secretary Steven Mnuchin, supporting a weaker greenback, continued exerting downward pressure on the US Dollar and dragged it to the lowest level in 3-years. 

This, against the backdrop of optimism over a favorable divorce deal with the EU, helped the pair to build on today's strong up-move, led by better-than-expected UK wage growth data.

Meanwhile, possibilities of some big stops being triggered, on a sustained break through the 1.4100 handle, further collaborated to the pair's strong upsurge of nearly 100-pips since the early European session.

The bulls, however, took a breather near the 1.4200 handle, with extremely overbought conditions now prompting some profit-taking following the pair's recent upsurge of nearly 350-pips over the past three trading session. 

Next on tap would be the release of flash US PMI prints, which along with existing home sales data would now be looked upon for some trading impetus. 

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes: “The 4 hours chart shows that technical indicators have lost their upward strength in extreme overbought territory, but with the pair posting higher highs, seems the risk remains skewed to the upside.”

“The immediate support is the 1.4100 figure, ahead of 1.4050, an early intraday high, followed by the 1.3990 price zone” she further added.