GBP/USD struggles to extend gains above 1.3000 amid coronavirus fears

GBP/USD looks to regain ground above the 1.3000 level, holding onto the overnight recovery gains following a sharp drop to six-day lows of 1.2917.

The cable witnessed good two-way business on Wednesday, having eroded over 150-pips in the European trading, as the coronavirus-induced lockdown fears triggered risk-aversion and bolstered the demand for the US dollar as a safe-haven. The higher-yielding pound was sold-off alongside the global stocks.

However, in the American session, the spot recaptured the 1.3000 level on headlines that the EU and the UK negotiators have made progress this week toward resolving some a big disagreement in Brexit talks. The renewed optimism raised hopes for a deal by early November and rescued the GBP bulls.

Despite the rebound, the further upside appears elusive, as markets are weighing in chances of a UK lockdown, especially after the Kingdom reported reports 24,701 new COVID-19 cases a day before.

Also, the US dollar bulls could regain control if the risk-aversion creeps back on lingering coronavirus concerns, as the daily count continues to grow rapidly across the globe. Further, markets also look forward to the Brexit developments and US GDP and Jobless Claims data for fresh directives on the major.

Meanwhile, the UK Trade minister Liz Truss is expected to set out the principles that underpin Britain’s future trade policy with the EU and the US later on Thursday.

GBP/USD technical levels

Immediate support is placed at 1.2982 (20-DMA), below which Wednesday’s low at 1.2917 would be tested. To the upside, the bulls need to take out the 1.3026/29 (100 and 200-DMA), in order to resume its journey towards 1.3050.  

GBP/USD additional levels