GBP/USD reverses the slide to 31-month lows, 1.2100 back on sight
|- GBP bulls attempt recovery on 1.20 handle, despite USD comeback.
- No-deal Brexit risks, UK recession fears to weigh on Cable’s recovery.
- First-tier UK jobs and inflation data to draw attention later this week.
The GBP/USD pair built on its recovery from 31-month lows of 1.2016 in the European session, having reversed the entire slide to now hover near the daily top of 1.2071.
Ireland to not renegotiate the Brexit backstop
The pound extended the recent bearish momentum and went on to hit the lowest levels since January 2017 in the Asian trades, in response to increased no-deal Brexit jitters and the UK Q2 GDP shocker. The Brexit anxiety intensified after it was reported that Ireland would not renegotiate the Brexit backstop at a meeting with UK Boris Johnson later this month. This report exacerbated the pain in the spot.
Despite the ongoing Brexit woes and broad US dollar comeback, the major managed to stage a solid recovery, as markets look to take profits off the table after the prices sustained the 1.20 handle and ahead of the key UK macroeconomic data releases, including the labor market and CPI report, due later in the week ahead.
The sentiment around the greenback across the board was lifted by a shift in the risk environment, as the US-China trade escalation hit investors’ mood. Going forward, it remains to be seen if the pair can take out the 1.21 handle on the road to recovery, as mounting UK recession fears continue to weigh. Recall that the second-quarter UK Gross Domestic Product (GDP) unexpectedly contracted in June.
GBP/USD Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.