GBP/USD recovers early lost ground, nearly unchanged around 1.2560-70 region
- GBP/USD reverses an early dip to 1.2520 region amid a modest USD pullback from highs.
- The USD bulls seemed rather unimpressed by Thursday’s mostly upbeat US macro data.
The GBP/USD pair managed to rebound around 50 pips from daily lows and is currently placed in the neutral territory, around the 1.2565-70 region.
The pair extended the previous day's retracement slide from mid-1.2600s and witnessed some follow-through selling through the first half of the trading action on Thursday. The downfall was exclusively sponsored by some haven flows towards the US dollar, led by the prevalent risk-off mood.
The latest optimism over a potential vaccine for the highly contagious coronavirus disease fizzled out rather quickly amid concerns about worsening US-China relations. This comes on the back of the ever-increasing COVID-19 cases globally, which took its toll on the global risk sentiment.
However, a weaker tone surrounding the US Treasury bond yields kept a lid on any strong gains for the greenback and assisted the pair to find some support ahead of the key 1.2500 psychological mark. Even Thursday's mostly upbeat US macro releases did little to impress the USD bulls.
Data published by the US Census Bureau revealed that the US monthly Retail Sales rose by 7.5% in June but were down 8.1% from the same period a year ago. Meanwhile, the Philly Fed Manufacturing Index came in at 24.1 for July as compared to the expected fall to 20 from 27.5 previous.
Separately, the US Initial Weekly Jobless Claims fell less than expected to 1.30 million during the week ending July 11 as against consensus estimates pointing to a drop to 1.250 million from 1.310 million recorded in the previous week.
It will now be interesting to see if the GBP/USD pair is able to capitalize on the intraday bounce or meets with some fresh supply at higher levels. Indications of a weaker opening in the US equity markets might continue to underpin the safe-haven USD and keep a lid on any strong gains.
Technical levels to watch