GBP/USD jumps to session tops and retreats, finds some resistance ahead of mid-1.2900s
|- GBP/USD regains positive traction amid some follow-through USD weakness.
- The US bond yields fall to fresh all-time lows and undermined the greenback.
- No-deal Brexit fears to cap gains ahead of the UK’s Brexit negotiations mandate.
The selling bias surrounding the greenback picked up pace in the last hour and lifted the GBP/USD pair to fresh session tops, closer to mid-1.2900s.
The prevailing risk-off mood – amid growing concerns over the global outbreak of the deadly coronavirus – led to an extension of the recent slump in the US Treasury bond yields. In fact, the yield on the benchmark 10-year government bond fell to fresh all-time lows and kept exerting some pressure on the US dollar.
The upside seems limited
Sustained USD weakness helped the pair to regain some positive traction on Thursday and recover a part of the previous session's sharp intraday fall of over 100 pips to sub-1.2900 levels. Apart from this, the uptick lacked any obvious catalyst and runs the risk of fizzling out quickly amid fears of a no-deal Brexit.
Given the uncertainty about the future UK-EU trade relationship, investors are likely to refrain from placing any aggressive bullish bets ahead of the UK's mandate for Brexit negotiations. Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further appreciating move.
Later during the early North-American session, important US macro releases might influence the USD price dynamics and further contribute towards producing some meaningful trading opportunities. Thursday's US economic docket highlights the release of revised Q4 GDP print and Durable Goods Orders data.
Technical levels to watch
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