GBP/USD climbs above 1.2900 on renewed USD weakness

GBP/USD gained traction and rose above 1.2900 in the American session.
Month-end flows seem to be weighing on the USD.
Upbeat market mood is helping GBP/USD edge higher.

Eren Sengezer FXStreet

The GBP/USD pair gained traction in the early American session and climbed to a fresh daily high of 1.2921. As of writing, the pair was up 0.4% on the day at 1.2913.

DXY drops below 94.00

A fresh USD selloff seems to be fueling the pair's rally. In the absence of significant fundamental drivers, the sharp drop witnessed in the US Dollar Index (DXY) suggests that month-end flows are weighing on the greenback. At the moment, the DXY is flat on the day at 93.89.

Earlier in the day, the data from the US showed that employment in the private sector rose by 749,000 in September and the economic activity in the second quarter contracted by 31.4%. Both of these figures came in better than analysts' estimates and helped market sentiment turn positive.

Additionally, US Treasury Secretary Mnuchin noted that he was optimistic about reaching a coronavirus aid deal with Democrats. Boosted by the upbeat data and Mnuchin's remarks, Wall Street's main indexes gained traction and put additional weight on the safe-haven greenback's shoulders. The S&P 500 Index is currently gaining more than 1% at 3,371.

On the other hand, British Prime Minister Boris Johnson acknowledged earlier in the day that the coronavirus is a "serious and growing problem" in the UK. If COVID-19 cases continue to rise in the UK, the GBP could struggle to preserve its strength against its rivals.

Technical levels to watch for

GBP/USD

Overview
Today last price	1.2911
Today Daily Change	0.0046
Today Daily Change %	0.36
Today daily open	1.2865

Trends
Daily SMA20	1.2936
Daily SMA50	1.3024
Daily SMA100	1.2744
Daily SMA200	1.272

Levels
Previous Daily High	1.2903
Previous Daily Low	1.2823
Previous Weekly High	1.2967
Previous Weekly Low	1.2676
Previous Monthly High	1.3396
Previous Monthly Low	1.2982
Daily Fibonacci 38.2%	1.2872
Daily Fibonacci 61.8%	1.2853
Daily Pivot Point S1	1.2824
Daily Pivot Point S2	1.2783
Daily Pivot Point S3	1.2744
Daily Pivot Point R1	1.2905
Daily Pivot Point R2	1.2944
Daily Pivot Point R3	1.2985

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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