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  • GBP/USD failed to capitalize on the attempted intraday positive move.
  • A slump in the US bond yields might cap the USD and limit the downside.

The GBP/USD pair faded an intraday bullish spike to levels just above the 1.3100 round-figure mark and is currently placed near the lower end of its daily trading range.

The pair did find some support at 50-day SMA and managed to gain some positive traction during the early European session on Monday. The uncertainty surrounding the BoE decision, scheduled later this week, turned out to be one of the key factors that prompted some intraday short-covering bounce.

Traders might prefer to stay on the sidelines

The pair, however, failed to capitalize on the attempted recovery, rather met with some fresh supply at higher levels and turned back lower for the third consecutive session. The prevailing risk-off environment benefitted the US dollar’s perceived safe-haven and exerted some pressure on the major.

With more than 2,700 people infected and 80 dead, growing market concerns that authorities might be struggling to contain the outbreak of the virus triggered a fresh wave of the risk aversion trade on the first day of a new trading week and underpinned demand for traditional safe-haven assets.

Meanwhile, the global flight to safety led to an intraday slump in the US Treasury bond yields, which might hold the USD bulls from placing any aggressive bets. Hence, it will be prudent to wait for some strong follow-through before positioning for any further near-term depreciating move amid absent relevant market moving economic releases.

Technical levels to watch