- GBP/USD continued showing some resilience below the very important 200-day SMA.
- Coronavirus jitters continued benefitting the safe-haven USD and capped the upside.
The GBP/USD pair spiked to fresh session tops, around the 1.2780 region in the last hour, albeit lacked any strong follow-through and quickly retreated few pips thereafter.
Having shown some resilience below the very important 200-day SMA, the pair managed to attract some buying interest on Thursday and shot to two-day tops during the mid-European trading session. The British pound got a minor lift after the UK finance minister, Rishi Sunak announced the new jobs support scheme.
In the new measures introduced this Thursday, the government will directly support the wages of people in work and increase wages to cover two-thirds of lost pay. The support scheme was a bit more generous than expected, which, in turn, prompted some technical buying around the sterling from a technically significant level.
However, concerns about the second wave of coronavirus infections, along with the likelihood of the global economic slowdown continued lending some support to the US dollar’s safe-haven status. This, in turn, held bulls from placing any aggressive bets and capped the upside for the GBP/USD pair amid risk of a no-deal Brexit.
It is worth reporting that the EU’s chief Brexit negotiator, Michel Barnier in London for informal talks until Friday. Investors might wait for fresh Brexit updates before positioning for any firm near-term direction. In the meantime, developments surrounding the coronavirus saga might continue to influence the GBP/USD pair.
Market participants now look forward to the US economic docket, highlighting the release of Initial Weekly Jobless Claims and New Home Sales data. This, along with a scheduled testimony by the Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin, will influence the USD price dynamics and provide some short-term trading impetus.
Technical levels to watch
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