- GBP/USD gained some positive traction on Thursday amid the prevalent USD selling bias.
- Reduced Fed rate hike bets, a fresh leg down in the US bond yields undermined the USD.
- COVID-19 jitters helped limit losses for the safe-haven USD and capped gains for the pair.
The GBP/USD pair traded with a mild positive bias through the early European session and was last seen hovering near the top end of its intraday trading range, just below mid-1.3900s.
The pair built on the previous day’s goodish rebound from the 1.3885 region and gained some follow-through traction through the first half of the trading action on Thursday. The uptick was exclusively sponsored by the prevalent bearish tone surrounding the US dollar, though lacked any strong follow-through buying.
The USD languished near multi-week lows amid expectations that the Fed will keep interest rates low for a longer period. Apart from this, the ongoing decline in the US Treasury bond yields further acted as a headwind for the greenback. That said, a softer risk tone helped limit the downside for the safe-haven USD.
Investors turned cautious amid renewed fears about another dangerous wave of coronavirus infections in some countries. This seemed to be the only factor that held bulls from placing any aggressive bets and might cap gains for the GBP/USD pair, at least for the time being, amid absent relevant market moving UK economic releases.
Meanwhile, the US economic docket features the release of Initial Weekly Jobless Claims. This, along with the US bond yields and the broader market risk sentiment, will influence the USD price dynamics. Apart from this, some cross-driven volatility stemming from the post-ECB moves in the EUR/GBP might further produce short-term trading opportunities.
Technical levels to watch
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