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  • GBP/USD gained some positive traction on Friday and recovered a part of the overnight losses.
  • The uptick lacked any fundamental trigger and could be attributed to a subdued USD demand.
  • Brexit uncertainties might keep a lid on any further gains ahead of the US monthly jobs report.

The GBP/USD pair edged higher during the early European session and refreshed daily tops in the last hour, with bulls now looking to build on the momentum beyond the 1.3300 mark.

Following an early dip to the 1.3255 area, the pair managed to gain some positive traction on the last day of the week and recovered a part of the previous day’s fall to weekly lows. The uptick lacked any obvious fundamental catalyst and could be solely attributed to a subdued US dollar demand.

A goodish pickup in the US Treasury bond yields extended some support to the greenback. However, investors refrained from placing any aggressive USD bullish bets ahead of the closely watched US monthly jobs report. This, in turn, led to consolidative price action around the greenback.

Meanwhile, the upside for the GBP/USD pair is likely to remain limited amid persistent Brexit-related uncertainties. It is worth recalling that Senior officials in the UK Prime Minister Boris Johnson’s office see only 30-40% chances that there will be a Brexit trade agreement with the European Union.

This, along with reports that the Brexit talks are close to collapse amid the impasse over key issues might keep a lid on any runaway rally for the GBP/USD pair. This makes it prudent to wait for some strong follow-through buying before positioning for any further intraday appreciating move.

From a technical perspective, the pair on Thursday showed some resilience below 200-hour SMA and managed to settle above a previous resistance breakpoint, turned support near the 1.3265-60 region. The price action favours bulls and supports prospects for a move back towards the 1.3400 mark.

Technical levels to watch

 

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