GBP/USD quickly retreats over 100 pips from daily tops, back below 1.1800 mark

The GBP/USD pair added to its strong intraday recovery gains and climbed to fresh session tops, beyond mid-1.1800s in the last hour, albeit quickly retreated around 100 pips thereafter.

The pair witnessed a dramatic intraday turnaround on the last trading day of the week and rallied around 450 pips from the vicinity of the 1.1400 round-figure mark, or the lowest level since 1985 set earlier during the Asian session.

The pair snapped three consecutive days of losing streak and the short-covering rally was sponsored by some US dollar profit-taking amid easing fears over tightening liquidity, backed by a coordinated effort central banks across the world.

It is worth recalling that the Bank of England on Thursday slashed interest rates to 0.1% and also announced to increase its holdings of the UK government/corporate bonds by £200 billion, taking the total level of QE to £645 billion.

Apart from some aggressive USD long-unwinding trade, the momentum lacked any obvious catalyst and hence, runs the risk of fizzling out rather quickly amid mounting fears over the economic fallout from the coronavirus pandemic.

Investors seemed convinced about an imminent global recession, which continued lending some support to the greenback's status as a reserve currency and kept a lid on any further recovery, rather attracted some fresh selling at higher levels.

Technical levels to watch