- GBP/USD gained strong follow-through traction for the second straight session on Thursday.
- Some cross-drive strength stemming from a slump in the EUR/GBP provided a goodish lift.
- A subdued USD price action remained supportive of the move up amid the risk-on impulse.
- An unexpected jump in the US Initial Weekly Jobless Claims failed to impress the USD bulls.
The GBP/USD pair continued scaling higher heading into the North American session and climbed to fresh weekly tops, around the 1.3775 region in the last hour.
The pair built on the previous day's solid rebound of over 130 pips from sub-1.3600 levels and gained some strong follow-through traction for the second consecutive session on Thursday. The momentum lacked any obvious fundamental catalyst and could be solely attributed to some cross-driven strength stemming from a sharp fall in the EUR/GBP.
Apart from this, a generally positive tone around the equity markets acted as a headwind for the safe-haven US dollar and provided an additional boost to the GBP/USD pair. On the economic data front, the US Initial Weekly Jobless Claims unexpectedly jumped to 419K during the week ended July 16 from the previous week's upwardly revised reading of 368K.
That said, the resurgence of the COVID-19 infections in the UK, along with the impasse over the Northern Ireland Protocol of the Brexit deal might cap gains for the GBP/USD pair. In fact, new cases have been rising by more than 50,000 a day in the UK. On the Brexit front, the EU rejected the UK’s demand for a new approach to the Northern Ireland Protocol.
Meanwhile, the UK Prime Minister spokesman told reporters this Thursday that Johnson had spoken to EU Commission Head and urged the EU to look at the proposals seriously. Hence, it will be prudent to wait for some strong follow-through buying before confirming that the GBP/USD pair has bottomed out in the near-term and positioning for any further appreciating move.
Technical levels to watch
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 holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.