- GBP/USD gains some traction for the second consecutive session on Wednesday.
- The final UK Services PMI was revised higher to 53.9 and remained supportive.
- Fears of a no-deal Brexit might keep a lid on any strong follow-through rally.
The British pound gained some positive traction in the last hour and lifted the GBP/USD pair beyond mid-1.3000s, or fresh session tops post-UK macro data.
A combination of supporting factors helped the pair to reverse an early dip to the vicinity of the key 1.30 psychological mark and turn higher for the second consecutive session on Thursday. The pair added to the previous session’s move and recovered further from six-week lows.
Pound supported by upbeat UK macro data
The initial leg of an uptick came on the back of news that a significant breakthrough in the race for coronavirus vaccine has been made by UK scientists. This led to a sudden turnaround in the global risk sentiment and weighed on the US dollar’s perceived safe-haven status against its British counterpart.
The uptick got an additional boost following the release of slightly better-than-expected UK services sector data. In fact, the final UK Services PMI came in at 53.9 for January as compared to 52.9 estimated, which inspired bullish traders and provided a modest lift to the sterling.
It, however, remains to be seen if the pair is able to capitalize on the positive move or meets with some fresh supply at higher levels amid growing market concerns that Britain might crash out of the European Union at the end of the transition period later this year.
Later during the early North-American session, the US economic docket – featuring the release of the ADP report on private-sector employment and ISM Non-Manufacturing PMI – might influence the USD price dynamics and produce some meaningful trading opportunities.
Technical levels to watch