GBP/USD retreats from highs near 1.2400 ahead of Trump’s conference

GBP/USD retreats from two-week highs at 1.2395 to levels right above 1.2300.
Pound loses steam as risk appetite wanes awaiting Trump’s conference on China.
Above 1.2363, the pair might advance towards 1.2643/48 – Credit Suisse.

Guillermo Alcala FXStreet

Sterling’s rally from 1.2230 lows has reached two-week highs at 1.2395. The pair, however, has not been able to consolidate at those levels and pulled back to 1.2300 area, turning negative on the day, as risk appetite waned with the investors awaiting US President Trump’s conference.

Pound gives away gains on renewed geopolitical woes

The GBP/USD has opened the day on a firm tone and extended Thursday’s rally, with the USD trading lower across the board weighed by downbeat US macroeconomic data. The preliminary US GDP data, which anticipated a 5% contraction in the first quarter, and the decline on US treasury bond yields have increased negative pressure on the USD.

Cable lost steam during the US trading session, with investors increasingly wary ahead of Trump’s conference. The US President has elevated the heat with China, vowing with a strong response to the new security bill on Hong Kong and the market is worried that tensions might spill into global trade, hampering the post-coronavirus recovery.

GBP/USD: A break through 1.2363 might open the doors towards 1.2643/48 - Credit Suisse

The FX analysts’ team at Credit Suisse sees the pound weak on a broad basis, yet, above 1.2363 they think bulls might gain confidence, “Above 1.2363 should confirm to see the downtrend break with resistance then seen next at 1.2467 and then more importantly at the April highs and 200-day average at 1.2643/48 and 1.2669 respectively.”

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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