GBP/USD recovers early lost ground, back near 1.2500 mark

The UK Conservative Party chose Boris Johnson to be the new UK Prime Minister.
The price action seemed rather unaffected by a follow-through USD buying interest.
Persistent fears of a no-deal Brexit should keep a lid on any meaningful recovery.

Haresh Menghani FXStreet

The GBP/USD pair quickly reversed an early European session dip to the 1.2420-15 region and spiked to fresh daily tops in the last hour, albeit lacked any strong follow-through.

The latest leg of a goodish recovery over the past couple of hours or so lacked any obvious catalyst and could be solely attributed to some short-covering bounce ahead of the results of the UK Conservative Party leadership contest, wherein Boris Johnson was chosen to be the next British PM.

The uptick, however, lacked any strong bullish conviction and remained capped below the key 1.2500 psychological mark in anticipation of more ministerial departures, kicked off with the UK Justice Minister David Gauke's resignation immediately after the announcement.

Meanwhile, a follow-through US Dollar buying - supported by tempered expectations of an aggressive monetary easing by the Fed, did little to influence the price action, with the GBP price dynamics turning out to be an exclusive driver of the pair's momentum on Tuesday.

It would now be interesting to see if the pair can capitalize on the recovery move or meets with some fresh supply at higher levels amid growing fears that the UK will crash out of the EU on October 31 without a deal.

Technical levels to watch

GBP/USD

Overview
Today last price	1.2459
Today Daily Change	-0.0017
Today Daily Change %	-0.14
Today daily open	1.2476

Trends
Daily SMA20	1.2556
Daily SMA50	1.2636
Daily SMA100	1.2861
Daily SMA200	1.2871

Levels
Previous Daily High	1.252
Previous Daily Low	1.2455
Previous Weekly High	1.2579
Previous Weekly Low	1.2382
Previous Monthly High	1.2784
Previous Monthly Low	1.2506
Daily Fibonacci 38.2%	1.248
Daily Fibonacci 61.8%	1.2495
Daily Pivot Point S1	1.2447
Daily Pivot Point S2	1.2418
Daily Pivot Point S3	1.2382
Daily Pivot Point R1	1.2512
Daily Pivot Point R2	1.2549
Daily Pivot Point R3	1.2578

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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