GBP/USD recovers early lost ground, back near 1.2500 mark
|- The UK Conservative Party chose Boris Johnson to be the new UK Prime Minister.
- The price action seemed rather unaffected by a follow-through USD buying interest.
- Persistent fears of a no-deal Brexit should keep a lid on any meaningful recovery.
The GBP/USD pair quickly reversed an early European session dip to the 1.2420-15 region and spiked to fresh daily tops in the last hour, albeit lacked any strong follow-through.
The latest leg of a goodish recovery over the past couple of hours or so lacked any obvious catalyst and could be solely attributed to some short-covering bounce ahead of the results of the UK Conservative Party leadership contest, wherein Boris Johnson was chosen to be the next British PM.
The uptick, however, lacked any strong bullish conviction and remained capped below the key 1.2500 psychological mark in anticipation of more ministerial departures, kicked off with the UK Justice Minister David Gauke's resignation immediately after the announcement.
Meanwhile, a follow-through US Dollar buying - supported by tempered expectations of an aggressive monetary easing by the Fed, did little to influence the price action, with the GBP price dynamics turning out to be an exclusive driver of the pair's momentum on Tuesday.
It would now be interesting to see if the pair can capitalize on the recovery move or meets with some fresh supply at higher levels amid growing fears that the UK will crash out of the EU on October 31 without a deal.
Technical levels to watch
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