GBP/USD refreshes session tops, still below 1.3000 mark as focus remains on BoE

• GBP/USD finds decent support near the 1.2900 mark and rebounds over 70 pips from lows.
• The USD struggled to capitalize on the post-FOMC recovery move and helped gain traction.
• Some positive Brexit developments further underpinned the British pound ahead of the BoE.

The GBP/USD pair managed to recover the early lost ground and was last seen trading near the top end of its daily trading range, around the 1.2970-75 region.

The pair witnessed some selling through the first half of the trading action on Thursday and extended the previous day’s retracement slide from the key 1.3000 psychological mark, or weekly tops. The US dollar added to the post-FOMC recovery move and got an additional boost from weaker global risk sentiment. This, in turn, was seen as a key factor exerting pressure on the GBP/USD pair.

The greenback, however, failed to preserve its gains, instead met with some fresh supply at higher levels and assisted the GBP/USD pair to find decent support near the 1.2900 round-figure mark. The pair bounced over 70 pips from daily lows and was further supported by reports that Britain offered tentative concessions on fisheries in trade talks with the European Union last week.

The latest comments by the European Union’s Brexit negotiator Michel Barnier further added to the optimism and underpinned the British pound. Barnier was noted saying that the UK’s move on fisheries is a glimmer of hope and he still believes that a deal is possible. Meanwhile, the upside seemed limited ahead of the key central bank event – the BoE monetary policy update.

The UK central bank is not expected to change its policy settings but provide signals to add more stimulus to support the economy from a possible Brexit shock. Hence, the key focus will be on the accompanying statement, which, along with the incoming Brexit-related headlines, will influence the near-term GBP price dynamics and provide a fresh directional impetus to the GBP/USD pair.

Technical levels to watch