- GBP/USD failed to capitalize on the previous session’s strength to one-week tops.
- Fears of a no-deal Brexit continue to keep a lid on every attempted positive move.
- Rebounding US bond yields revived the USD demand and added to the selling bias.
The GBP/USD pair continued losing ground through the mid-European session and refreshed daily lows, around the 1.2925-20 region in the last hour.
A combination of factors led to some renewed weakness on Wednesday and forced the pair to erase a major part of the overnight strong gains to one-week tops – levels just above the key 1.30 psychological mark.
GBP/USD weighed down a modest USD uptick/no-deal Brexit fears
As investors assessed the economic impact of the coronavirus outbreak, a sharp intraday turnaround in the US Treasury bond yields from all-time lows helped ease the recent bearish pressure surrounding the US dollar.
This comes on the back of fears that Britain would crash out of the European Union at the end of the transition period and turned out to be one of the key factors that prompted some fresh selling around the major.
Even from a technical perspective, the pair's inability to capitalize on the attempted recovery and repeated rejection from 50-day SMA suggests that the near-term bearish pressure might still be far from being over.
Hence, some follow-through weakness, back towards testing sub-1.2900 level en-route YTD lows around mid-1.2800s, remains a distinct possibility amid absent relevant market-moving economic releases from the US.
Technical levels to watch
Any subsequent slide is likely to find some support near the 1.2900 mark, below which the pair is likely to accelerate the fall further towards challenging YTD lows, around mid-1.2800s. On the flip side, the 1.30 mark might continue to act as immediate strong resistance and 50-day SMA, around 1.3030-35 region should cap any further gains
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 stays below 1.0700 after US data
EUR/USD stays in a consolidation phase below 1.0700 in the early American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold trades on the back foot, manages to hold above $2,300
Gold struggles to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to reverse its direction.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.