- Some renewed USD weakness helped regain some traction on Thursday.
- The uptick is likely to remain limited amid persistent Brexit uncertainties.
- Investors on Thursday will also take cues from important UK macro data.
Following the previous session's rollercoaster ride, the GBP/USD pair managed to regain some positive traction on Thursday and was last seen trading around the 1.2225-30 region.
It is worth reporting that the pair on Wednesday rallied back to the 1.2300 neighbourhood in reaction to the UK Times report that the EU is prepared to concede a time-limit on the Irish backstop. The knee-jerk bullish spike fizzled out quickly, rather met with some aggressive supply and dragged the pair back into the negative territory after the Northern Irish Democratic Unionist Party (DUP) rejected the EU's concession on Brexit and the EU officials denied the report.
Weaker USD extended some support
Meanwhile, bulls continued showing some resilience below the 1.2200 round-figure mark and some renewed US Dollar weakness helped limit any further losses. With Wednesday's FOMC meeting minutes doing little to dampen prospects for yet another interest rate cut in October, the ongoing slide in the US Treasury bond yields undermined demand for the Greenback and turned out to be one of the key factors providing a minor lift to the major.
It, however, remains to be seen if the pair is able to capitalize on the momentum or the uptick is still seen as an opportunity to initiate some fresh bearish positions amid increasing odds of the UK's exit from the EU without a deal. Apart from the incoming Brexit-related headlines, Thursday's packed UK economic docket might further influence the broader market sentiment surrounding the British Pound and provide some short-term trading impetus.
The UK macro data scheduled for release this Thursday includes the UK monthly GDP print for August along with Manufacturing and Industrial Production figures for the same month. Recent weakness in UK PMI data has revived recessionary fears in the UK and hence, any positive surprise might be enough to prompt some near-term short-covering move, albeit the attempted recovery seems more likely to remain capped amid persistent Brexit uncertainties.
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 comes under pressure near 1.0630
Further gains in the Greenback encourage sellers to maintain their control over the risk complex, forcing EUR/USD to retreat further and revisit the 1.0630 region as the US session draws to a close.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.