GBP/USD sticks to modest gains, comfortably above 1.2700 handle
| • The ongoing USD profit-taking slide helps to gain some positive traction.
• Disappointing US consumer sentiment index adds to the USD weakness.
• Brexit uncertainties keep the GBP bulls on the defensive and cap further gains.
The GBP/USD pair quickly reversed a mid-European session dip to sub-1.2700 level and is now headed towards the top end of its daily trading range.
Optimism over fresh US-China trade talks continued prompting some US Dollar profit-taking on the last trading day of the week and was seen as one of the key factors driving the pair higher for the second consecutive session.
The greenback kept losing ground following the release of weaker than expected release of the Prelim UoM US Consumer Sentiment index, coming in at 11-month low level of 95.3 for August as compared to July’s upwardly revised reading of 97.9.
Despite the uptick, the pair lacked any strong conviction and remained capped below overnight swing high amid growing concerns over a no-deal Brexit, which had been exerting downward pressure on the British Pound.
At current levels, the pair remains on track to post sixth consecutive week of declines and the lowest weekly close since mid-June 2017, albeit 1.2662 level, over 13-month lows touched on Wednesday.
Technical levels to watch
The 1.2750-55 zone might continue to act as an immediate hurdle, above which the pair is likely to aim towards reclaiming the 1.2800 handle en-route weekly tops, around the 1.2825-30 region.
On the flip side, the 1.2700-1.2690 area now seems to have emerged as an immediate strong support, which if broken might turn the pair vulnerable to head back towards testing YTD low, near the 1.2660 level.
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