- GBP/USD reversed dismal UK macro data-led early dip to sub-1.2300 levels.
- A modest USD pullback from 2-1/2-week tops extended some support to the pair.
- The greenback remained depressed following the mixed US Durable Goods Orders.
The GBP/USD pair held steady near the 1.2345-50 region through the early North-American session and had a rather muted reaction to the US macro data.
The pair quickly reversed an early dip to sub-1.2300 levels – touched in the aftermath of dismal UK retail sales figures – and staged a goodish intraday bounce of around 75 pips amid a modest US dollar pullback.
Despite the inconclusive results from the Gilead Sciences’ antiviral drug trial in treating the COVID-19, the key USD Index struggled to preserve its early gains to 2-1/2 week tops and extended some support to the major.
The greenback remained depressed near session lows after data released from the US showed that Durable Goods Orders plunged 14.4% in March. The reading was worse than 11.9% fall anticipated, albeit did little to provide an impetus.
The horrible reading, to a larger extent, was negated by relatively stronger core durable goods orders data, which came in to show a modest 0.2% drop as compared to 5.8% decline expected and the previous month’s -0.7%.
Nevertheless, the data further fueled uncertainty over the severity of the economic fallout from the coronavirus pandemic. This coupled with increasing prospects of an extended lockdown in the UK might cap gains for the pair.
Even from a technical perspective, the pair has been struggling to find acceptance above 200-hour SMA. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move.
Technical levels to watch