GBP/USD off weekly lows, still in the red near 1.3300 mark post-UK PMI
|- GBP/USD witnessed some follow-through selling for the second consecutive session on Thursday.
- The USD built on its recovery from two-year lows and was seen as a key factor behind the slide.
- The sterling was weighed down by the BoE Governor Bailey’s dovish comments, softer UK PMI.
The GBP/USD pair maintained its offered tone near the lower end of its weekly range, around the 1.3300 mark, and moved little post-UK data.
Following the previous day's intraday bounce of around 70 pips, the pair met with some fresh supply on Thursday and extended this week's retracement slide from the 1.3480 region, or YTD tops. The downtick marked the second consecutive day of a negative move and was sponsored by the prevalent bid tone surrounding the US dollar.
The USD built on this week's goodish bounce from two-year lows set on Tuesday and was further supported by a modest pickup in the US Treasury bond yields. The USD bulls largely ignored Wednesday's weaker-than-expected ADP report, which showed that the US private-sector employers added 428K jobs in August as against 950K expected.
On the other hand, the British pound was being pressured by the Bank of Governor Andrew Bailey's overnight dovish sounding comments. While testifying before parliament Bailey said that the downside risk to forecasts from the coronavirus outbreak is much bigger than for Brexit and increase prospects for more policy easing.
This coupled with a downward revision of the UK Services PMI, coming in at 58.8 for August as compared to the preliminary estimate of 60.1, further took its toll on the sterling. Bulls, however, have been showing some resilience below the 1.3300 mark, warranting some caution before positioning for any further near-term depreciating move.
Market participants now look forward to the US economic docket, highlighting the release of ISM Non-Manufacturing PMI. The data might influence the USD price dynamics ahead of Friday's US monthly jobs report and assist traders to grab some short-term opportunities later during the early North American session.
Technical levels to watch
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