GBP/USD struggles to capitalize on modest intraday gains beyond 1.3100 mark

• GBP/USD gains some positive traction and snaps a five-day losing streak to a multi-week low. 
• A modest USD downtick lends support to the pair, though a combination of factors caps gains.
• Diminishing odds for an aggressive Fed policy easing limit the USD losses and act as a headwind.

The GBP/USD pair attracts some buyers during the Asian session on Tuesday and for now, seems to have snapped a five-day losing streak to a nearly four-week low, around the 1.3560 area touched the previous day. Spot prices, however, struggle to build on the uptick beyond the 1.3100 mark, warranting some caution for bullish traders.

The US Dollar (USD) remains depressed below a seven-week high touched on Friday and turns out to be a key factor lending some support to the GBP/USD pair. That said, reduced bets for another oversized interest rate cut by the Federal Reserve (Fed), amid signs of a still resilient US labor market, might hold back the USD bears from placing aggressive bets. Apart from this, a softer risk tone should act as a tailwind for the safe-haven buck and cap the upside for the currency pair.

Investors remain concerned that Middle East tensions could turn into a wider conflict. Furthermore, not-so-optimistic comments by the National Development and Reform Commission (NDRC) – overshadow the recent optimism led by China's stimulus bonanza and tempers investors' appetite for riskier assets. This is evident from a generally weaker tone around the equity markets, which, in turn, could drive some haven flows towards the USD and keep a lid on the GBP/USD pair. 

Meanwhile, the Bank of England (BoE) Governor Andrew Bailey said last week that there was a chance that the central bank could become a bit more aggressive in cutting rates if there's further good news on inflation. This might further contribute to capping gains for the British Pound (GBP) and suggests that the path of least resistance for the GBP/USD pair is to the downside. Hence, any further move up might still be seen as a selling opportunity and runs the risk of fizzling out quickly. 

Moving ahead, there isn't any relevant market-moving economic data due for release on Tuesday, either from the UK or the US, leaving the USD and the GBP/USD pair at the mercy of Fedspeak. The focus, meanwhile, remains glued to the release of the FOMC meeting minutes on Wednesday. This will be followed by the US Consumer Price Index (CPI) and the Producer Price Index (PPI), which will play a key role in driving the USD demand and provide a fresh impetus to the currency pair.