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  • The USD reverses early dip and remains supported by Friday’s upbeat NFP.
  • Fears of a no-deal Brexit and BoE rate cut bets continue to weigh on the GBP.

The GBP/USD pair failed to capitalize on its early uptick and has now retreated around 30-pips from an intraday high level of 1.2540.

The US President Donald Trump’s fresh criticism about the Fed’s policy tightening triggered a modest US Dollar pullback from over two-week tops – touched in reaction to Friday’s upbeat headline NFP print, and assisted the pair to gain some positive traction on the first day of a new trading week.  

However, persistent fears of a no-deal Brexit, along with the recent dovish shift by the BoE Governor Mark Carney – in the wake of softer incoming UK data held investors from placing any aggressive bets and kept a lid on any strong recovery, rather prompted some selling at higher levels.  

The pair has now drifted back closer to the key 1.2500 psychological mark, which if broken decisively might now set the stage for an extension of the depreciating move, though absent relevant market-moving economic releases might help limit deeper losses, at least for the time being.

Moving ahead, the Fed Chair Jerome Powell’s public appearance on Tuesday, followed by two-day Congressional testimony on Wednesday and Thursday will be closely scrutinized for fresh clues over the central bank’s near-term monetary policy outlook and influence the near-term USD price dynamics.

Meanwhile, this week’s economic docket – highlighting the key releases of the monthly GDP print from the UK and the latest US consumer inflation figures, might further assist investors to determine the pair’s near-term trajectory amid the UK political and economic uncertainty.

Technical levels to watch