- Sliding US bond yields weighed on the USD and helped bounce off lows.
- Persistent fears of a no-deal Brexit hold investors from buying the GBP.
The GBP/USD pair struggled to capitalize on its mid-European session bounce from fresh 27-month lows, albeit has managed to hold its neck above the 1.2400 handle.
Having touched an intraday low level of 1.2382 – the lowest since April 2017, the pair witnessed some short-covering move in the wake of a subdued US Dollar price action, albeit struggled to attract any strong buying interest amid persistent fears of a no-deal Brexit.
A fresh leg of a free fall in the US Treasury bond yields exerted some pressure on the greenback, which remained on the defensive following the disappointing release of US housing market data, and turned out to be one of the key factors behind the intraday rebound.
Apart from Brexit woes, tempered expectations of aggressive easing by the Fed when it announces its latest monetary policy decision at the end of a two-day meeting on July 30-31 further collaborated towards capping the pair’s attempted recovery move.
Hence, it would be prudent to wait for a strong follow-through before confirming that the pair might be in the process of forming a near-term bottom or positioning for any meaningful short-covering bounce back towards reclaiming the key 1.2500 psychological mark.
Technical levels to watch