- GBP/USD staged a goodish intraday bounce from the vicinity of the 1.3200 mark.
- Weaker risk tone benefitted the safe-haven USD and capped any strong move up.
- Investors also preferred to wait for Brexit updates before placing directional bets.
The GBP/USD pair recovered a major part of its intraday losses and jumped back above mid-1.3200s, albeit lacked any strong follow-through.
The pair witnessed some selling through the first half of the European trading session on Thursday amid reports that European leaders will demand the European Commission to publish no-deal plans. The GBP/USD pair, however, managed to find decent support and staged a goodish intraday bounce of around 50-60 pips from the vicinity of the 1.3200 mark in the absence of official confirmation.
Investors seemed reluctant to place aggressive bets, rather preferred to wait for fresh Brexit updates before positioning for the next leg of a directional move. An EU diplomatic source confirmed that the EU’s chief Brexit negotiator Michel Barnier is going ahead with a briefing to update envoys of the bloc’s 27 member states on the latest in trade talks with Britain on Friday.
Meanwhile, the upside remains limited, at least for the time being, amid a pickup in the US dollar demand. Concerns about the economic fallout from the imposition of new restrictions in several US states overshadowed the optimism about promising late-stage vaccine trial results. This, in turn, took its toll on the global risk sentiment and drove some heaven flows towards the greenback.
Market participants now look forward to the US economic docket, featuring the releases of Philly Fed Manufacturing Index and Initial Weekly Jobless Claims. The data, along with developments surrounding the coronavirus saga, will influence the USD price dynamics. Apart from this, the incoming Brexit-related headlines might further assist traders to grab some short-term opportunities.
Technical levels to watch
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