GBP/USD retreats over 100 pips from 1-week tops, still well bid above mid-1.1800s

The GBP/USD pair trimmed a part of its early strong gains and has now retreated over 100 pips from one-week tops, set earlier this Wednesday.

A combination of supporting factors helped the pair to gain some strong follow-through traction for the second consecutive session on Wednesday and recover further from multi-decade lows.

The sterling remained well supported by the UK's stricter lockdown measures to combat the COVID-19 pandemic and got an additional boost from Wednesday’s mostly in line UK CPI inflation figures.

On the other hand, the US dollar remained depressed for the fourth straight day in the wake of the Fed’s unprecedented action to buy unlimited amounts of Treasuries and mortgage-backed securities.

This coupled with the latest optimism over the US Senate’s agreement on the economic stimulus package dented the greenback’s perceived safe-haven status against its British counterpart.

However, a goodish pickup in the US Treasury bond yields helped limit the USD downside and kept a lid on the pair’s strong intraday positive move to the vicinity of the key 1.20 psychological mark.

Meanwhile, the US macro data, showing that headline Durable Goods Orders recorded an unexpected growth of 1.2% in February, failed to impress traders or provide any meaningful impetus.

Technical levels to watch