- GBP/USD gained traction on Thursday and recovered further from Wednesday’s over one-week lows.
- The heavily offered tone surrounding the USD was seen as a key factor behind the pair’s positive move.
- The near-term technical set-up warrants some caution before placing any aggressive directional bets.
The GBP/USD pair jumped to fresh session tops in the last hour, with bulls now eyeing a move towards reclaiming the 1.3100 round-figure mark.
The pair gained some positive traction on Thursday, snapping two consecutive days of the losing streak and recovered further from the key 1.3000 psychological mark, or over one-week lows set in the previous day. The positive move was exclusively sponsored by the prevalent offered tone surrounding the US dollar, which remained depressed in the wake of the impasse over the next round of the US fiscal stimulus.
The greenback was further pressured by a fresh leg down in the US Treasury bond yields after a record $38 billion auction. This comes amid the latest optimism over a potential vaccine for the highly contagious coronavirus disease, which further undermined the USD's relative safe-haven status against its British counterpart. This, in turn, remained supportive of the intraday positive move for the GBP/USD pair.
Apart from a broad-based USD weakness, the uptick lacked any obvious fundamental catalyst and hence, runs the risk of fizzling out rather quickly. Expectations that the US lawmakers will eventually reach a consensus on the stimulus measures might hold investors from placing aggressive USD bearish bets and keep a lid on any strong gains for the GBP/USD pair.
Even from a technical perspective, the pair has been oscillating in a broader trading range since the beginning of this month. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move. Conversely, a sustained break below the 1.3000 mark will be seen as a fresh trigger for bearish traders.
Moving ahead, market participants now look forward to the release of the US Initial Weekly Jobless Claims. The data might influence the USD price dynamics and produce some meaningful trading opportunities later during the early North American session.
Technical levels to watch
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800, as traders lack directional impetus amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days.
US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount
The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February. The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.