• Absent negative Brexit headlines prompt bearish traders to lighten their positions.
• Modest USD retracement/disappointing ADP report remained supportive of the uptick.
The GBP/USD pair built on its goodish intraday bounce and refreshed session tops, around the 1.2775 region post-US ADP report.
Absent negative Brexit headlines prompted some short-covering move around the British Pound and turned out to be one of the key factors behind the pair's quick reversal from an early European session dip to the 1.2700 handle.
The up-move got an additional boost from a modest US Dollar retracement amid an inversion of the short end of the US Treasury yield curve, pointing to an impending recession in the world's largest economy.
The greenback lost some additional ground following today's disappointing ADP report, which showed that private sector employer added 179K new jobs in Nov. as compared to 195K expected and 225K previous.
Today's US economic docket also features the release of ISM non-manufacturing, though seems unlikely to provide any meaningful impetus amid persistent Brexit uncertainties.
Moreover, investors might hold back from placing any aggressive bets ahead of the crucial Parliamentary vote on the UK PM Theresa May’s negotiated deal on Dec. 11th, which might further collaborate towards capping any runaway rally.
Technical levels to watch
Immediate resistance is pegged near the 1.2800 handle, above which a fresh bout of short-covering could lift the pair further towards the 1.2845-50 supply zone. On the flip side, any meaningful retracement now seems to find some support near the 1.2725 area and is closely followed by the 1.2700 round figure mark.
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