GBP/USD strengthens further beyond 1.2500 mark amid notable USD supply

• GBP/USD gains strong traction for the third straight day amid sustained USD selling.
• Positive news about COVID-19 vaccine continued undermining the safe-haven USD.
• Technical buying above the 1.2500 mark further contributed to the ongoing move up.
• The focus now shifts to the closely-watched US monthly jobs report – known as NFP.

The GBP/USD pair continued scaling higher through the early European session and shot to over one-week tops, around the 1.2520-25 region in the last hour.

The pair built on this week’s strong rebound from the 1.2260-50 region and gained some strong follow-through traction for the third consecutive session on Thursday. The strong positive momentum was exclusively led by the prevalent selling bias around the US dollar.

The latest optimism over yet another positive results from the early-stage human trial for a COVID-19
vaccine remained supportive of the upbeat market mood. This coupled with a fresh leg down in the US Treasury bond yields further undermined demand for the safe-haven USD.

Meanwhile, the latest leg of a sudden pick up over the past hour or so could further be attributed to some technical buying on a sustained move beyond the key 1.2500 psychological mark. This warrants some caution for bullish traders amid persistent Brexit-related uncertainties.

Adding to this, concerns that the ever-increasing coronavirus cases across the world could trigger renewed lockdown measures to contain the spread might drive some haven flows towards the greenback. This, in turn, might keep a lid on any strong gains for the GBP/USD pair.

Moving ahead, Thursday’s focus will be on the release of the closely-watched US monthly jobs report. The headline NFP is expected to show that the US economy added 3 million jobs in June and the unemployment rate is anticipated to have edged lower to 12.3% from 13.3% previous.

Technical levels to watch