GBP/USD once again finds support near 1.2100 mark, turns neutral post-UK services PMI
|- The ongoing slump in the US bond yields undermined the USD and helped limit early dip.
- Upbeat UK services PMI for July provided a minor boost during the early European session.
- Persistent fears of a no-deal Brexit might continue to keep a lid on any meaningful bounce.
The GBP/USD pair quickly reversed an early dip to the 1.2100 neighbourhood and rallied around 35-pips on upbeat UK macro data, albeit lacked any strong follow-through.
A follow-through US Dollar pullback - led the ongoing freefall in the US Treasury bond yields amid the global flight to safety, helped the pair to stall its intraday downfall and once again find some support near the mentioned handle. With investors looking past last week's hawkish rate cut by the Fed, the US President Donald Trump's unexpected announcement on Thursday to slap 10% tariffs on additional $300 billion worth of Chinese goods rattled global financial markets and triggered a fresh wave of global risk-aversion trade.
Meanwhile, the British Pound got an additional boost during the early European session on Monday following the release of stronger-than-expected UK services PMI, which edged up to a nine-month high level of 51.4 in July as compared to a steady reading of 50.2 expected, albeit increasing odds of a no-deal Brexit might hold the bulls on the defensive and keep a lid on any runaway rally, at least for the time being.
It is worth mentioning that The Sunday Telegraph had quoted the UK PM Boris Johnson's senior adviser - Dominic Cummings, saying lawmakers will not be able to stop a no-deal Brexit by bringing a vote of no confidence, which did little to ease market concerns that the UK will eventually crash out of the EU on October 31 and might continue to dent the broader market sentiment surrounding the Sterling.
Apart from the incoming Brexit-related headlines, traders on Monday will further take cues from the release of the US ISM non-manufacturing PMI, which might influence the USD price dynamics and produce some short-term opportunities later during the early North-American session.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.