- GBP/USD found some support near 100-day SMA and staged a modest intraday bounce.
- The uptick was led by subdued USD demand and was unaffected by softer UK macro data.
- The increasing risk of a no-deal Brexit capped gains ahead of Monday’s high-level EU-UK talks.
The GBP/USD pair struggled to capitalize on its intraday recovery move and has now retreated around 70 pips from the daily swing highs.
The pair stalled this week’s corrective slide, rather managed to find some support ahead of the 100-day SMA, near the 1.2545 region, and staged a goodish rebound amid a subdued US dollar price action.
The upbeat market mood undermined the safe-haven greenback and was seen as one of the key factors lending some support to the GBP/USD pair.
Despite renewed fears over a second wave of coronavirus infections and the Fed’s gloomy outlook, investors seemed convinced about the prospects of a sharp V-shaped economic recovery. The confidence was evident from a fresh leg up across the global equity market and dented demand for traditional safe-haven currencies.
Meanwhile, the GBP bulls seemed rather unaffected by mostly disappointing UK macro releases – the monthly GDP print and manufacturing/industrial production data. However, the increasing risk of a no-deal Brexit kept a lid on any strong gains. Hence, the key focus will be on the high-level call between the UK and EU leaders on June 15.
Moving ahead, market participants now look forward to the only scheduled release of the preliminary June Michigan Consumer Sentiment Index from the US. The data, along with the broader market risk sentiment will influence the USD price dynamics and produce some trading opportunities on the last day of the week.
Technical levels to watch
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