GBP/USD sits near 34-month tops, bulls await a sustained move beyond 1.4000 mark

• Sustained USD selling pushed GBP/USD to fresh multi-year tops on Friday.
• Bulls largely shrugged off the disappointing release of UK Retail Sales data.
• A goodish pickup in the US bond yields did little to impress the USD bulls.

The GBP/USD pair refreshed 34-month tops in the last hour, albeit seemed struggling to capitalize on the move beyond the key 1.4000 psychological mark.

Following a brief consolidation through the first half of the trading action on Friday, the pair managed to regain some positive traction and seemed unaffected by disappointing UK Retail Sales data. A broad-based US dollar was seen as a key factor that provided a modest lift to the GBP/USD pair.

The USD was being weighed down by Thursday's disappointing US Initial Jobless Claims raised doubts about the pace of the US economic recovery. This, along with a sudden rebound in the equity markets further undermined the greenback's relative safe-haven status against its British counterpart.

Meanwhile, a goodish pickup in the US Treasury bond yields did little to provide any respite to the USD bulls. In fact, the yield on the benchmark 10-year US bond inched back closer to one-year tops amid expectations for the passage of the US President Joe Biden's proposed $1.9 trillion stimulus package.

On the other hand, the sterling benefitted from the UK's impressive pace of COVID-19 vaccinations, which should allow the UK government to lift restrictions and get the economy moving. That said, slightly overbought conditions kept a lid on any further gains for the GBP/USD pair, at least for now.

Market participants now look forward to the US economic docket, highlighting the release of flash PMI prints (Manufacturing and Services) and Existing Home Sales data. Apart from this, the US bond yields might influence the USD price dynamics and produce some trading opportunities around the GBP/USD pair.

Technical levels to watch