GBP/USD retreated over 50 pips from daily tops, back near 1.2800 mark

• GBP/USD staged a goodish intraday recovery from the 200-DMA support.
• The uptick got an additional boost from positive Brexit-related headlines.
• The UK PM Johnson announced new restrictions to curb virus outbreak.

The GBP/USD pair jumped back above mid-1.2800s during the mid-European session, albeit lacked any strong follow-through buying and quickly retreated over 50 pips from daily tops.

The pair witnessed some aggressive short-covering move from the vicinity of the 1.2700 mark – nearing the very important 200-day SMA – after the BoE Governor Andrew Bailey downplayed expectations of negative interest rates. The strong intraday recovery movement got an additional boost from positive Brexit-related headlines. EU source reportedly said that Brexit talks have been going a bit better than expected and that there is a ‘window of opportunity’.

Separately, Ireland’s foreign minister, Simon Coveney was noted saying that there is a growing sense that perhaps Britain doesn’t want a Brexit deal and the UK government tactic is making complex talks even more difficult. Meanwhile, the UK PM spokesman confirmed the EU Chief Brexit Negotiator Michel Barnier’s visit tomorrow for informal talks. The spokesman further stressed that the UK will continue to work hard on securing a Brexit deal.

Nevertheless, the GBP/USD pair moved into the positive territory and shot an intraday high level of 1.2867. The uptick was further supported by a softer tone surrounding the US dollar amid a modest recovery in the US equity markets.

In the latest developments surrounding the coronavirus saga, the UK Prime Minister Boris Johnson announces new restrictions for England. The GBP/USD pair witnessed a modest pullback and was last seen hovering in the neutral territory, around the 1.2810-1.2800 region. It will now be interesting to see if the pair is able to capitalize on the move or the attempted recovery meets with some fresh supply at higher levels. This makes it prudent to wait for some strong follow-through buying before placing fresh bullish bets.

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