- The prevalent USD selling bias helped limit the intraday downtick for GBP/USD.
- BoE’s decision to not cut rates into negative territory provided a modest boost.
- The UK central bank increased its QE size by £150 billion, more than expected.
The GBP/USD pair built on its steady intraday positive move and shot to fresh session tops, around the 1.3050 region in the last hour.
The pair managed to attract some dip-buying on Thursday and has now recovered over 100 pips from daily swing lows, around the 1.2930 region touched during the early European session. Expectations that Democrat challenger Joe Biden will be the next US president kept the US dollar bulls on the defensive and helped limit the early slide.
Meanwhile, the British pound got an additional boost after the Bank of England (BoE) refrained from cutting interest rates into negative territory. Meanwhile, the BoE expanded its Asset Purchase Program by £150 billion to cushion the UK economy from the damage caused by second nationwide lockdown to curb COVID-19 outbreak.
As investors looked past Thursday’s key central bank event, developments surrounding the Brexit landscape will now play a key role in influencing the sentiment surrounding the sterling. Apart from this, the USD price dynamics will be looked upon for some short-term trading opportunities ahead of the FOMC policy update later this Thursday.
In the meantime, the release of usual Initial Weekly Jobless Claims will be looked upon for some short-term trading opportunities during the early North American session.
Technical levels to watch
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