- GBP/USD reversed an early dip to 1.2500 neighbourhood and gained some traction.
- A subdued USD price action prompted some intraday short-covering move on Friday.
- The uptick lacked any bullish conviction amid mounting fears over the virus outbreak.
The GBP/USD pair edged higher during the early European session and refreshed daily tops, around the 1.2625 region in the last hour, albeit lacked any strong follow-through.
Following an early dip to the vicinity of the key 1.2500 psychological mark, the pair gained some positive traction and managed to recover further from five-month lows set in the previous session.
A subdued US dollar price action seemed to be the only factor that prompted some intraday short-covering move on Friday, all against the backdrop of over 350 pips steep decline in the previous day.
A sharp turnaround in the global risk sentiment, as depicted by a recovery in equity markets, weighed on traditional safe-haven currencies and forced the US dollar to consolidate the overnight strong gains.
Apart from a mildly weaker USD, the uptick lacked any fundamental catalyst and thus, runs the risk of fizzling out rather quickly amid reports that the UK government might shut down schools across the country.
Hence, it will be prudent to wait for some strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term and positioning for any further recovery move.
Technical levels to watch
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