- GBP/USD’s bounce remains capped near 1.2780.
- UK Sunak’s furlough scheme offers temporary reprieve.
- US dollar looks to regain poise ahead of Durable Goods data.
Having faltered the bounce once again near 1.2780 region, GBP/USD remains side-lined near 1.2750 ahead of the London open, as the bull-bear tug-of-war extends amid a stall in the US dollar’s rally and cautious optimism.
The greenback is off the overnight lows and holds steady so far this Friday, prompting subdued trading in the cable amid a lack of fresh catalysts.
The market mood remains cautiously optimistic amid hopes over a UK COVID-19 late-stage vaccine trial and US stimulus deal, which limits the bounce in the US dollar across its major peers. The US dollar index trades modestly flat at 94.37, having partially recovered from the NY lows to 94.20 reached amid mixed US data and Wall Street bounce.
The cable once again attempted a modest recovery after the UK’s Finance Minister Rishi Sunak rolled out measures in its job protection scheme, as the country battles the second-wave of coronavirus-induced restrictions. The unexpected jump in the September CBI Distributive Trades Survey on realized sales also offered some reprieve to the GBP bulls.
Meanwhile, optimism over a post-Brexit transition trade deal also aided the rebound in the major from two-month lows of 1.2675. On Thursday, the Bank of England (BOE) Governor Andrew Bailey reiterated that it is in the interest of both sides to have a trade deal between the UK and the EU.
Next of note for the pair remains the BOE’s Q3 Quarterly Bulletin and US Durable Goods data for near-term trading opportunities.
GBP/USD: Technical levels
Technically, the price is ranging in a symmetrical triangle formation on the hourly chart since Tuesday. The bulls are now eyeing to clear the falling trendline resistance at 1.2769 to confirm a bullish breakout, which could add legs to the correction move higher. Alternatively, the rising trendline support at 1.2705 is the level to beat for the bears.