GBP/USD struggles for direction, flat-lined below mid-1.2700s ahead of US data

GBP/USD quickly reverses a mid-European session dip to sub-1.2700 levels.
Soothing Brexit-related comments extended some support to the sterling.
Coronavirus jitters continued underpinning the USD and capped the upside.

Haresh Menghani FXStreet

The GBP/USD pair rallied around 50 pips in the last hour and was last seen hovering in the neutral territory, just below mid-1.2700s.

The pair continued showing some resilience below the very important 200-day SMA and quickly reversed a mid-European session dip to sub-1.2700 levels. The latest leg of a sudden spike over the past hour or so was led by some optimistic Brexit related comments.

The UK PM spokesman crossed the wires in the last hour and said that they are working hard to reach a deal with the EU. The spokesman also said that the UK has useful exchanges with the EU in recent weeks and is working with the EU on N.Ireland Brexit protocol.

The spokesman further added that the UK will strengthen pandemic restrictions if needed. This comes amid a turnaround in the global risk sentiment, which continued benefitting the US dollar's safe-haven status and capped any strong gains for the GBP/USD pair.

The latest optimism over additional US fiscal stimulus measures turned out to be short-lived, instead was overshadowed by concerns that the second wave of the coronavirus infections could derail the economic recovery. This, in turn, weighed on investors' sentiment.

It will now be interesting to see if the GBP/USD pair is able to capitalize on the intraday bounce or the lack of any follow-through buying prompt traders to initiate some fresh bearish positions. Nevertheless, the pair remains on track to end the week on a downbeat note.

Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders. The data, along with the broader market risk sentiment might influence the USD price dynamics and produce some meaningful trading opportunities on the last day of the week.

Technical levels to watch

GBP/USD

Overview
Today last price	1.2743
Today Daily Change	-0.0005
Today Daily Change %	-0.04
Today daily open	1.2748

Trends
Daily SMA20	1.3019
Daily SMA50	1.3015
Daily SMA100	1.273
Daily SMA200	1.2722

Levels
Previous Daily High	1.2781
Previous Daily Low	1.269
Previous Weekly High	1.3007
Previous Weekly Low	1.2777
Previous Monthly High	1.3396
Previous Monthly Low	1.2982
Daily Fibonacci 38.2%	1.2747
Daily Fibonacci 61.8%	1.2725
Daily Pivot Point S1	1.2698
Daily Pivot Point S2	1.2649
Daily Pivot Point S3	1.2607
Daily Pivot Point R1	1.2789
Daily Pivot Point R2	1.2831
Daily Pivot Point R3	1.288

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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