GBP/USD jumps to mid-1.2600s, back closer to multi-week tops

The emergence of some fresh USD selling lifted the GBP/USD pair to mid-1.2600s, well within the striking distance of three-week tops set on Thursday.

The pair managed to attract some dip-buying on the last day of the week and rallied around 90 pips from daily swing lows to the 1.2565 region. Having failed to capitalize on its intraday positive move, the US dollar met with some fresh supply during the early North American session and was seen as one of the key factors that extended some strong support to the GBP/USD pair.

Despite concerns about the ever-increasing coronavirus cases, the greenback struggled to attract any haven bids, instead was undermined by a fresh leg down in the US Treasury bond yields. A weaker sentiment around the global equity markets drove investors to traditional safe-haven assets and dragged the longer-term US bond yields to the lowest level since April.

With the USD price dynamics turning out to be an exclusive driver of the pair's momentum, bulls seemed rather unaffected by persistent Brexit uncertainties. It is worth recalling that the European Union's executive arm on Thursday said that talks on the post-Brexit relationship have made little progress and there are still significant differences on a number of important issues.

Nevertheless, the GBP/USD pair still seems poised to make a fresh attempt towards challenging the very important 200-day SMA, around the 1.2700 mark. Some follow-through buying will be seen as a fresh trigger for bullish traders and set the stage for an extension of the pair's upward trajectory witnessed over the past two weeks or so.

Technical levels to watch