GBP/USD clings to modest gains above 1.2400 mark, US ISM PMI/FOMC minutes eyed

• GBP/USD managed to attract some dip-buying near the 1.2360-55 region on Wednesday.
• A goodish intraday pickup in the USD demand kept a lid on any strong gains for the pair.
• The USD struggled to preserve its early gains on positive news about COVID-19 vaccine.
• Investors now eye US ISM PMI and FOMC meeting minutes for some trading impetus.

The GBP/USD pair struggled to capitalize on its goodish intraday bounce of around 60 pips, albeit has managed to hold steady around the 1.2400 round-figure mark.

The pair reversed an early dip to the 1.2360-55 region and refreshed weekly tops during the early part of the European trading session on Wednesday. However, a goodish intraday pickup in the US dollar demand kept a lid on any strong gains for the GBP/USD pair.

The greenback drove some haven flows amid concerns about a surge in the number of coronavirus cases across the world. This coupled with a strong upsurge in the US Treasury bond yields further underpinned the greenback and capped the GBP/USD pair.

The USD maintained its mildly positive tone following the release of the ADP report, which showed that private-sector employment rose by 2369K in June. The reading was lower than 3000K expected but was largely negated by an upward revision of the previous month’s reading.

On the other hand, the British pound lost some strength after Jonathan Haskel – a member of the Monetary Policy Committee (MPC) of the Bank of England (BoE) – left doors open for the possible implementation of negative interest rates.

Meanwhile, the latest positive headlines related to the development of a vaccine for COVID-19 boosted the global risk sentiment. This, in turn, dented the greenback’s relative safe-haven status and remained supportive of a positive mood around the GBP/USD pair.

According to STAT News, Biopharmaceutical New Technologies (BioNTech) announced on Wednesday that the COVID-19 vaccine that they co-developed with Pfizer triggered a strong immune response in the early stage of human trials.

Moving ahead, market participants now look forward to the release of US ISM Manufacturing PMI. This will be followed by the minutes from the latest FOMC policy meeting, which might influence the USD price dynamics and produce some short-term trading opportunities.

Technical levels to watch