GBP/USD clings to strong gains near 1.42 handle

   •  Eases from tops on some profit-taking.
   •  Surging bond yields fail to revive USD demand.
   •  Technically remains poised to gain further.

The GBP/USD pair trimmed some of its early strong gains and quickly retreated around 30-35 pips from near two-month tops touched earlier.

The pair's sharp retracement an intraday high level of 1.4235, the highest since early Feb., lacked any obvious catalyst and could be attributed to some profit-taking, especially after the pair's recent upsurge.

Meanwhile, a goodish pickup in the US Treasury bond yields did little to ease the bearish pressure surrounding the US Dollar, which continued lending support and helped limit any further downside. 

The pair is holding comfortably above the 1.4200 handle and now seems to have confirmed a bullish breakout through a short-term ascending trend-channel. Hence, a follow-through up-move, led by some fresh technical buying, remains a distinct possibility.

In absence of any major market moving economic releases, traders would look forward to comments by influential FOMC members in order to grab some short-term trading opportunities.

Technical levels to watch

Momentum beyond 1.4235 level is likely to get extended towards 1.4265-70 intermediate hurdle before the pair eventually darts towards reclaiming the 1.4300 handle. On the flip side, 1.4170 area might now act as an immediate support, which if broken might prompt some additional profit-taking and drag the pair below 1.4130 level, and the 1.4100 handle, towards retesting the 1.4085-75 strong horizontal support.