- GBP / USD recovers from the day’s lows at 1.2880 and returns above 1.2900.
- The pound remains on the defensive amid a strong US dollar.
- Below 1.2928, GBP / USD bullish bias will be reversed: Commerzbank.
The pound sterling it has trimmed initial losses in the closing hours of the US session, after bouncing from the 10-day lows at 1.1880 to regain the 1.2900 level.
GBP remains weak amid overall USD strength
The pound depreciated for the second day in a row on Thursday, weighed down by the overall strength of the US dollar. A combination of market concerns about the impact of the second wave of COVID-19, exacerbated by the new round of lockdowns imposed in Europe, and uncertainty over the US elections has propelled the US dollar to reach a month-long high against a basket. of coins.
On the upside, the softer tone of Brexit news this week appears to have offered some support to the British pound. With just two months to close a deal and avoid a disorderly exit from the EU, the state of the negotiations remains the main driver for the pound. In this context, the extension of the talks this week has boosted the confidence of a last minute agreement.
GBP / USD major support at 1.2928 – Commerzbank
In the technical domain, Karen Jones, FICC Technical Analysis Research Team Leader at Commerzbank, points to key support at 1.2928 to maintain the bullish bias: “GBP / USD has retraced, tested and maintained the short-term bullish trend at 1.2928. As long as this holds, the market is able to retest the March high of 1.3201 and the recent high of 1.3483 (…) Below the uptrend of 1.2928 is the June high of 1.2814. Failure here will target 1.2709, the 200-day MA, then 1.2445 and 1.2250 / 00 “.
Credits: Forex Street
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