- Highly oversold conditions prompt some aggressive intraday short-covering move.
- The uptick lacked any strong bullish conviction amid persistent no-deal Brexit fears.
The GBP/USD pair built on its goodish intraday bounce from near 29-month lows, albeit struggled to extend the momentum and faltered ahead of the 1.2200 round figure mark.
The pair added to its overnight steep decline and remained under some intense selling pressure through the Asian session on Tuesday on the back of rising odds that the UK will eventually crash out of the EU on October 31.
The pair, however, managed to find some support ahead of March 2017 swing lows and witnessed some aggressive intraday short-covering move from the vicinity of the 1.2100 round figure mark amid highly oversold conditions.
Apart from this, the pair’s intraday recovery of around 70-pips lacked any obvious fundamental catalyst and hence, fizzled out rather quickly, clearly indicating that investors remain reluctant to buy the British Pound.
Meanwhile, the US Dollar was seen consolidating its recent strong gains to two-month tops and did little to provide any impetus, with the GBP price dynamics turning out to be an exclusive driver of the pair’s momentum.
It would now be interesting to see if the pair is able to capitalize on the recovery move or meets with some fresh supply as market participants now look forward to the US economic releases for some short-term opportunities.
Tuesday’s US economic docket features Personal Income and Spending data for June, the core PCE price index and the Conference Board’s Consumer Confidence Index, due later during the early North-American session.
Technical levels to watch
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