GBP/USD eases from tops, still well bid above mid-1.2900s
- GBP/USD staged a goodish intraday bounce from sub-1.2900 level amid weaker USD.
- The prevalent risk-off mood, coronavirus jitters helped limit the downside for the buck.
- Brexit uncertainties, fears of lockdown in the UK should cap the upside for the major.
The GBP/USD pair built on its goodish intraday positive move and shot to fresh daily tops, around the 1.2985-90 region in the last hour, albeit quickly retreated few pips thereafter.
Following an early dip to sub-1.2900 levels, the pair witnessed some short-covering move and has now recovered the previous day's negative move to two-week tops. In the absence of any negative Brexit headlines, a mildly softer tone surrounding the US dollar was seen as a key factor driving the GBP/USD pair higher.
The greenback trimmed a part of its recent strong gains to four-week tops and was being pressured by the uncertainty about the actual outcome of the US presidential election. However, concerns about the potential economic fallout from new COVID-19 restrictions and weaker sentiment around the equity markets helped limit the USD downfall.
The positive move assisted the GBP/USD pair to snap two consecutive days of the losing streak, albeit a combination of factors might keep a lid on any runaway rally. Persistent Brexit uncertainties, along with fears of stricter lockdown measures to curb the rapid increase in coronavirus cases in the UK should cap the upside for the major.
On the economic data front, mostly upbeat second-tier US economic data did little to impress the USD bulls or provide any meaningful impetus to the GBP/USD pair. Friday's US economic docket also features the release of Chicago PMI and Revised Michigan Consumer Sentiment, though is likely to pass unnoticed amid the uncertain US political situation.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
