- The GBP / USD pair witnessed some easing on the first day of a new trading week.
- A modest rebound in the USD put additional downward pressure on the pair.
- Low liquidity prevented investors from making aggressive bets and helped limit losses.
The pair GBP/USD it quickly recovered around 40-50 pips from the daily lows and was last seen trading modest losses above the key psychological 1.3500 level.
The pair was unable to capitalize on its initial rally, but found some supply near the 1.3575 region and extended the pullback of previous sessions from near the yearly highs. As investors looked beyond the optimism of the post-Brexit trade deal, investors seemed inclined to lighten their bullish bets on the British pound amid dovish trade action.
The drop in intraday retracement accelerated since the early European session and dragged GBP / USD to an intraday low of 1.3474. A positive rally in the US dollar, supported by the recovery in US Treasury yields, put some downward pressure on majors, although the decline remained limited amid prevailing risk appetite.
Global risk sentiment received a new boost on the first day of a new business week after US President Donald Trump signed a $ 2.3 trillion pandemic aid and spending package on Sunday. The bill restores unemployment benefits to millions of Americans and prevented a shutdown of the federal government, which, in turn, boosted investor confidence.
Apart from this, the relatively low trading volumes prevented investors from making aggressive bets and extended some support, rather than helping the GBP / USD pair to quickly recover from daily lows. The pair now appears to have stabilized near 1.3500 and remains at the mercy of USD price dynamics amid the absence of a relevant fundamental catalyst.
Meanwhile, events related to the coronavirus saga could instill some volatility in financial markets. This could provide some momentum and help traders seize some short-term opportunities.
Technical levels
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