- GBP/USD met with some fresh supply on Thursday amid a modest pickup in the USD demand.
- Concerns about worsening US-China relations extended some support to the safe-haven USD.
- Upbeat UK monthly employment details failed to impress the GBP bulls or provide any impetus.
The GBP/USD pair maintained its offered tone near session lows, around mid-1.2500s and had a rather muted reaction to the latest UK macro data.
The pair extended the previous day’s retracement slide from the 1.2650 region and remained depressed through the first half of the trading action on Thursday amid a modest US dollar strength. The latest optimism over a potential vaccine for the highly contagious coronavirus disease turned out to be short-lived, with concerns about worsening US-China relation driving some haven flows towards the greenback.
The GBP/USD pair has now erased the overnight gains, albeit the downside remained cushioned as the USD lacked any strong bullish conviction on the back of weaker tone surrounding the US Treasury bond yields. This coupled with better-than-expected UK monthly employment detail further extended some support to the British pound and further collaborated towards limiting the downside, at least for the time being.
According to the Office for National Statistics, the number of people claiming jobless benefits unexpectedly fell by 28.1K in June as against consensus estimates pointing to an increase by 250K. Adding to this, the official unemployment rate remained unchanged at 3.9% for May as compared to 4.2% anticipated.
Market participants now look forward to the US economic docket, highlighting the release of monthly Retail Sales, Philly Fed Manufacturing Index and Initial Weekly Unemployment Claims. The data, along with the broader market risk sentiment might influence the USD price dynamics and produce some short-term trading opportunities.
Technical levels to watch
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