GBP/USD recovers early lost ground, moves back above 1.2600 mark
- GBP/USD managed to find some support near 1.2565 region amid a modest USD pullback.
- A fresh leg down in the US bond yields undermined the greenback and remained supportive.
The GBP/USD pair recovered around 50 pips from the early European session dip and refreshed daily tops, around the 1.2615 region in the last hour.
The pair managed to attract some dip-buying near the 1.2565 region and for now, seems to have stalled its retracement slide from near four-week tops set on Thursday. The US dollar struggled to preserve its early gains and was seen as one of the key factors lending some support to the GBP/USD pair.
The global risk sentiment took a hit after the US reported a record – over 60,000 – new coronavirus cases on Thursday. This, in turn, drove flows towards traditional safe-haven assets and led to a fresh leg down in the US Treasury bond yields, which fell to the lowest level since April and undermined the greenback.
Apart from a modest USD pullback, the GBP/USD pair's intraday bounce lacked any obvious catalyst and lacked any strong follow-through. Hence, it will be prudent to wait for some strong follow-through buying before positioning for the resumption of the recent bullish trend witnessed over the past two weeks or so.
In the absence of any major market-moving economic releases, either from the UK or the US, the USD price dynamics might continue to act as a key driver of the pair's momentum. This coupled with any fresh Brexit-related headlines might influence the sterling and produce some meaningful trading opportunities.
Technical levels to watch