- GBP/USD gains some traction and stages a modest bounce from three-week lows.
- Mostly better-than-expected UK macro data remained supportive of the uptick.
- Persistent Brexit uncertainties, coronavirus virus crisis might cap any further gains.
The GBP/USD pair held on to its mildly positive tone near session tops, around the 1.2275-80 region and had a rather muted reaction to the UK economic releases.
The pair managed to find some support near mid-1.2200s on Wednesday and staged a modest intraday recovery from three-week lows, snapping two consecutive days of losing streak. The uptick was further supported by slightly better-than-expected UK macro data.
The preliminary GDP report showed that the UK economy contracted less-than-anticipated, by 2% during the first quarter of 2020. The monthly print also bettered market expectations and showed a contraction of 5.8% in March as against 8% decline estimated.
Adding to this, the UK Manufacturing and Industrial Production data also surpassed consensus estimates, which coupled with a subdued US dollar price action remained supportive of the mildly positive tone surrounding the GBP/USD pair.
It, however, remains to be seen if the pair is able to capitalize on the move or runs into some fresh supply at higher levels amid fears about the second round of coronavirus infections and the lack of progress in Brexit negotiations.
Technical levels to watch