- Softer risk mood benefitted the USD and exerted some pressure on GBP/USD.
- The pair found some support 1.2180 area, though lacked any obvious catalyst.
- Investors look forward to BoE Governor Bailey’s comments for a fresh impetus.
The GBP/USD pair quickly recovered around 40 pips from five-week lows and moved further beyond the 1.2200 mark, back closer to session tops.
The pair extended its recent rejection slide from the very important 200-day SMA and remained depressed for the fourth consecutive session on Thursday. The downbeat market mood benefitted the US dollar’s relative safe-haven status against its British counterpart and was seen as one of the key factors exerting some pressure on the pair.
Growing fears about the second wave of coronavirus infections, along with fading hopes for a quick global economic recovery weighed on investors’ sentiment. Apart from this, the greenback was further supported by the fact that Fed Chair Jerome Powell, in a highly anticipated speech on Wednesday, rejected the idea of negative rates in the US.
The GBP/USD pair dropped to the lowest level since April 7, albeit managed to find some support near the 1.2180 region. The intraday bounce lacked any obvious fundamental catalyst and could be solely attributed to some repositioning trade ahead of the BoE Governor Andrew Bailey’s appearance, which should influence sentiment surrounding the sterling.
Later during the early North-American session, the release of the US Initial Weekly Jobless Claims – estimated to come in at 2.5 million – will also be looked upon to grab some short-term trading opportunities.
Technical levels to watch
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