GBP/USD rebounds from multi-week lows, lacks follow-through ahead of US CPI
- GBP/USD finds support ahead of 200-DMA and stages a goodish recovery from multi-week lows.
- The prevalent USD selling bias prompted some short-covering move amid oversold conditions.
- The attempted bounce runs the risk of fizzling out quickly amid growing fears of a no-deal Brexit.
The GBP/USD pair recovered around 100 pips from multi-week lows and refreshed daily tops, around the 1.2865 region in the last hour, albeit lacked any follow-through.
The pair added to previous day's heavy losses and continued losing ground through the first half of the trading action on the last day of the week. Growing fears of a no-deal Brexit continued weighing heavily on the British pound, which, in turn, was seen as one of the key factors behind the early slide.
Bulls largely shrugged off mostly upbeat UK Manufacturing/Industrial Production figures and the prevalent selling bias around the US dollar. The greenback remained depressed amid the deadlock over the next round of the US fiscal stimulus measures and was further pressured by a strong rebound in the US equity markets.
As investors await fresh developments surrounding the coronavirus saga, extremely oversold conditions on intraday charts assisted the GBP/USD pair to find some support ahead of the 200-day SMA. That said, any meaningful recovery attempt might be seen as a selling opportunity and runs the risk of fizzling out rather quickly.
Market participants now look forward to the release of the latest US consumer inflation figures. The data, along with the broader market risk sentiment will influence the USD price dynamics and provide some short-term trading impetus during the early North American session.
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.
