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  • A goodish pickup in the USD demand exerted some pressure on Wednesday.
  • Increasing odds of a majority for Conservatives helped limit deeper losses.
  • Dip-buying helped reverse a dip to sub-1.2900 levels ahead of FOMC minutes.

The GBP/USD pair has managed to recover a major part of its early lost ground to sub-1.2900 level and has now moved well within the striking distance of daily tops.
The pair extended this week’s pullback from the vicinity of the key 1.30 psychological mark, or four-week tops, and remained under some selling pressure for the second consecutive session on Wednesday amid a goodish pickup in the US dollar demand.

Downside remains cushioned

In absence of any fresh UK political/Brexit-related headlines, deteriorating global risk sentiment, amid persistent trade uncertainty, benefitted the US dollar’s perceived safe-haven status and prompted some follow-through long-unwinding around the major.
In the latest trade-related development, the US President Donald Trump on Tuesday warned of more tariffs if talks with China fail. Adding to this, a US legislation aimed at protecting human rights in Hong Kong was further seen fueling tension between the world’s two largest economies.
However, the fact that the incoming election polls have been indicating a majority for the UK Prime Minister Boris Johnson’s Conservative Party, the British pound managed to attract some dip-buying interest and helped the pair to recover a part of its early lows ground.
Moving ahead, the release of the latest FOMC meeting minutes will grab the spotlight on Wednesday and play a key role in influencing the USD price dynamics, which might produce some meaningful trading opportunities later during the US session.

Technical levels to watch