GBP/USD depressed near weekly lows, below 1.2900 mark ahead of US data
- GBP/USD bulls failed to capitalize on the prevailing USD selling bias.
- Fears of a no-deal Brexit remained a key overhang for the sterling.
- Friday’s US macro data eyed for some short-term trading impetus.
The GBP/USD pair seesawed between tepid gains/minor losses through the mid-European session and remained confined in a range near the lower end of its weekly trading range.
The selling pressure around the US dollar remained unabated through the mid-European session on Friday amid firming market expectations that the Fed will cut interest rate to offset any negative impact of the deadly coronavirus outbreak.
Traders refrained from placing directional bets
The GBP bulls, however, failed to capitalize on the prevailing weaker tone surrounding the greenback and preferred to remain on the sidelines amid fears that Britain might crash out of the European Union at the end of the transition period.
Market worries resurfaced this week after the EU's mandate on the post-Brexit negotiations emphasized on the need for a 'level playing field' while the UK threatened to walk away from trade talks on WTO rules in June unless there is the "broad outline" of an agreement.
Meanwhile, a mild recovery in the equity markets allowed the US Treasury bond yields to bounce off record low levels. This eventually helped ease the USD bearish pressure and might act as a catalyst for some fresh selling around the major.
Moving ahead, market participants now look forward to the US economic docket, featuring the releases of Personal Income/Spending data, Core PCE Price Index and Chicago PMI, for some short-term trading opportunities on the last day of the week.
Technical levels to watch