GBP/USD erases daily losses and spikes toward 1.3000 after comments from EC President
|- Pound spikes as Ursula von der Leyen still thinks a Brexit deal is possible.
- GBP/USD finds resistance near the 1.3000 area and retreats.
The GBP/USD pair jumped to 1.2999 after comments from European Commission President Ursula Von der Leyen. It then pulled back and as of writing, it is hovering around 1.2950, the same level it closed on Wednesday.
Earlier on Thursday, cable tumbled to 1.2863 after the Bank of England mentioned it is evaluating how negative interest rates can be implemented if the outlook for inflation and growth deteriorates. The pound dropped sharply across the board and then recovered modestly.
More recently is spiked to the upside, after Ursula von der Leyen mentioned she is convinced that a trade deal between the European Union and the United Kingdom is still possible.
Also, the GBP/USD is being supported by the decline in the DXY during the American session and by a recovery in equity markets. In Wall Street, the Dow Jones is falling 0.40% but is off lows.
Economic data released on Thursday in the US came in mostly below expectations but market participants ignored it. Initial and Continuing Jobless Claims fell modestly, reaching the lowest level since April, while Housing Starts and Building Permits pulled back in August.
From a technical perspective, the negative intraday outlook eased after the recent rebound in GBP/USD. Still, the pair appears to be headed toward a consolidation pace after rising during three consecutive days. The rally found resistance at the 1.3000 level and pulled back. On the flip side, a key support stands around 1.2870 followed by 1.2820.
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