• GBP/USD attempts a bounce but firmer USD caps the upside.
  • EU calls on Brexit minister to stop ‘political posturing’ over NI protocol.
  • BoE’s Bailey downplays inflation concerns, eyes on risk trends, Brexit.

GBP/USD is attempting a tepid recovery towards 1.3450 heading into the European open, as the risk sentiment improves. However, the further upside appears elusive amid a stronger US dollar and persistent Brexit worries.

Brexit concerns loom

At press time, the currency pair is recovering losses near 1.3445, having hit the intra-day lows at 1.3428 early on.

The latest uptick in the spot comes on the back of improving market mood, as the Asian equities jump back into the green after a negative opening while the S&P 500 futures rise 0.31% so far.

Markets seem to look past the resurfacing European COVID-19 concerns, as expectations of a faster Fed taper amid a strengthening US economy underpin the mood. However, further recovery appears elusive, as the US dollar holds onto recent gains alongside a rebound in the Treasury yields.  

On Friday, the US dollar rallied hard to retest the 16-month highs against its major peers after a risk-off wave gripped the financial markets on renewed concerns over a potential lockdown in Europe, in the face of coronavirus contagion. The major fell as low as 1.3408 on heightened demand for the safe-haven dollar.

Meanwhile, on the Brexit front, the European Commission Vice President Maroš Šefčovič accused the UK Brexit Minister David Frost of ‘political posturing’ over the Northern Ireland (NI) protocol, citing ‘more urgency’ required in negotiations.

Investors digest the weekend’s comments from the Bank of England (BoE) Governor Andrew Bailey. Bailey said that inflation could be "elevated for longer" but there is also a chance that it does not prove as persistent as feared.

Next of relevance for the spot remains the US Existing Home Sales data for some fresh trading incentives. However, the broader market sentiment, Brexit headlines and the US dollar dynamics will continue to emerge as the main catalysts for the cable.

GBP/USD: Additional levels to consider

GBP/USD

Overview
Today last price 1.3441
Today Daily Change -0.0001
Today Daily Change % -0.01
Today daily open 1.3443
 
Trends
Daily SMA20 1.3565
Daily SMA50 1.3631
Daily SMA100 1.3719
Daily SMA200 1.3835
 
Levels
Previous Daily High 1.351
Previous Daily Low 1.3408
Previous Weekly High 1.3514
Previous Weekly Low 1.3396
Previous Monthly High 1.3834
Previous Monthly Low 1.3434
Daily Fibonacci 38.2% 1.3447
Daily Fibonacci 61.8% 1.3471
Daily Pivot Point S1 1.3397
Daily Pivot Point S2 1.3351
Daily Pivot Point S3 1.3295
Daily Pivot Point R1 1.35
Daily Pivot Point R2 1.3556
Daily Pivot Point R3 1.3602

 

 

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