GBP/USD spikes to session tops; bulls struggle to find acceptance above 1.2200 mark

• GBP/USD staged a solid intraday recovery amid some aggressive USD selling bias.
• The prevalent risk-on mood weighed heavily on the greenback’s safe-haven status.
• Persistent Brexit uncertainties might keep a lid on any strong gains for the pound.

The GBP/USD pair spiked to fresh daily tops, around the 1.2200 mark during the early North American session, albeit quickly retreated few pips thereafter.

The pair built on its goodish intraday recovery move and has now rallied over 125 pips from multi-week lows, around the 1.2075 region, touched in reaction to talks that the BoE might push interest rates below zero.

As investors digested the BoE Chief Economist Andrew Haldane’s dovish comments over the weekend, some renewed US dollar selling bias extended some support to the sterling and prompted some intraday short-covering move.

Despite the Fed Chair Jerome Powell’s upbeat comments about the US economy, the USD struggled to attract any meaningful buying interest, instead retreated further from three-week tops set on Friday.

The prevalent upbeat market mood, as depicted by a strong rally in the global equity markets, was seen as one of the key factors undermining the greenback’s relative safe-haven status and driving the GBP/USD pair higher.

It, however, remains to be seen if the pair is able to capitalize on the momentum or the attempted recovery is still seen as a selling opportunity amid the lack of any progress in the UK-EU Brexit negotiations.

It is worth recalling that the latest round of negotiations between the UK and the EU officials ended with no positive outcome on the so-called level playing field. This, in turn, might cap any strong gains for the pound.

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