- GBP/USD stalled this week’s strong positive move and faced rejection near the 1.4000 mark.
- A pickup in the US bond yields helped revive the USD demand and exerted some pressure.
- Mostly softer UK economic data did little to impress bulls or provide any meaningful impetus.
The GBP/USD pair maintained its offered tone below mid-1.3900s and had a rather muted reaction to the UK macro releases.
The pair faced rejection near the key 1.4000 psychological mark and for now, seems to have stalled this week’s strong positive move from the vicinity of over one-month lows touched last Friday. This marked the first day of a negative move in the previous four and was exclusively sponsored by the emergence of some fresh buying around the US dollar.
A modest uptick in the US Treasury bond yields assisted the USD to stage a goodish bounce from one-week lows, which, in turn, exerted some downward pressure on the GBP/USD pair. That said, the risk-on mood, which got an additional boost after US President Joe Biden signed a $1.9 trillion stimulus bill into law, capped gains for the safe-haven USD.
On the other hand, the British pound remained on the defensive following the release of mostly softer UK economic data, which showed that the economy contracted by 2.9% MoM in January. Adding to this, the UK Industrial and Manufacturing Production fell more than anticipated, by 1.5% and 2.3%, respectively during the reported month.
Meanwhile, the GBP/USD pair has now eroded a part of the previous day’s strong positive move and remains at the mercy of the USD price dynamics. Later during the early North American session, second-tier US data, along with the US bond yields will influence the USD price dynamics and produce some trading opportunities around the GBP/USD pair.
Technical levels to watch
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