- GBP/USD struggled to find acceptance above 1.2600 mark and witnessed a modest pullback.
- The increasing risk of hard Brexit prompted some profit-taking slide around the British pound.
- The prevalent USD selling bias helped limit any meaningful slide ahead of the US macro data.
The GBP/USD pair surrendered a major part of its daily gains to one-month tops and has now dropped to the lower end of its daily trading range, just above mid-1.2500s.
The pair struggled to find acceptance above the 1.2600 round-figure mark and for now, seems to have stalled its recent upward trajectory witnessed over the past one week or so. The intraday pullback lacked any obvious catalyst and could be solely attributed to some profit-taking amid rising odds of a no-deal Brexit.
The market concerns resurfaced on Wednesday after the Bank of England Governor Andrew Bailey reportedly told banks to step up plans for the UK to leave the European Union without a trade deal. This comes on the back of the lack of progress in the ongoing Brexit talks and took its toll on the British pound.
On the other hand, the selling bias around the US dollar remained unabated on the back of growing optimism about a sharp V-shaped recovery for the global economy. This, in turn, extended some support to the GBP/USD pair and helped limit any deeper losses, at least for the time being.
The pair was last seen hovering around 100-day SMA as market participants now look forward to the US macro data. Wednesday’s US economic docket highlights the release of the ADP report on private-sector employment and ISM Non-Manufacturing PMI, which might influence the USD price dynamics and provide a fresh impetus.
Technical levels to watch
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