GBP/USD rebounds sharply from the vicinity of 200-DMA support, back above 1.30 mark

   “¢   Investors looked past Corbyn’s negative Brexit comments.
   “¢   The ongoing slump in the US bond yields weighs on the USD.

The GBP/USD pair rallied over 40-pips during the early North-American session, with bulls now looking to build on the momentum back above the key 1.30 psychological mark.

The pair extended its retracement slide from one-week tops set last Friday and continued losing ground on Thursday in wake of some negative Brexit headlines. The already weaker sentiment surrounding the British Pound deteriorated further after the opposition Labour Party leader Jeremy Corbyn poured cold water over the UK cross-party Brexit talks.

The pair touched an intraday low level of 1.2967 or 1-1/2 week lows but managed to find decent support ahead of the very important 200-day SMA. After showing some resilience, the US Dollar witnessed some selling in the last hour amid the ongoing slump in the US Treasury bond yields and seemed to be the only factor behind the pair’s latest leg of a sudden spike.  

It, however, remains to be seen if the recovery is backed by any genuine buying or is solely led by some short-covering move as the market focus remains glued to two-day high-level US-China trade negotiations, which has been the key driver of the broader market risk sentiment since the beginning of this week.

Technical levels to watch

“Some resistance awaits at 1.3035 which separated ranges of late. Further above, 1.3080 was a high point earlier this week, and 1.3130 was a swing high last week,” writes Yohay Elam, FXStreet’s own Analyst. “Below the battle line of 1.2990 which was a swing low last week, cable has support at 1.2960 which was the low point in March. It is followed by 1.2920 which capped GBP/USD in late April and 1.2870, the low point in April,” he added further.