GBP/USD fades a spike to 1.3500 neighborhood

After bottoming out at 1.3363 earlier during Asian trading session, the GBP/USD pair gained further traction and rose to 1.3494 before retracing back to currency trade around mid-1.3400s. 

In the post-Brexit political development in UK, justice secretary Michael Gove announced his intention to lead the Conservative Party while Boris Johnson decided to opt out of the UK's PM contest.

The pair surged to the vicinity of 1.3500 handle before witnessed fresh selling pressure to retraced back as markets now await for BOE Governor Mark Carney's speech on how the central bank would handle the Brexit referendum that would be followed by a press-conference.

Earlier during European session, the final UK GDP reading for Q1 remained unchanged at 0.4% estimated previously, while the current account balance missed expectations and showed a deficit of £32.59 billion for the first quarter. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "according to the 4 hours chart, the price has little scope for rallies, as the Momentum indicator has lost upward strength and turned south within positive territory, whilst the RSI aims higher around 44, also far from supporting a bearish case. In the same chart, the 20 SMA is flat around 1.3350, and it would take a break below it to see the pair resuming the downside."

"Shorter term, the immediate support comes at 1.3420, with a break below it pointing to a test of the mentioned SMA. An advance beyond 1.3535 should anticipate some additional gains, and the pair can extend then up to 1.3570/1.3610."