- GBP/USD failed to capitalize on the overnight goodish positive move.
- Brexit uncertainty, a pickup in the USD demand exerted some pressure.
The GBP/USD pair edged lower through the early North-American session on Thursday and refreshed daily lows, around the 1.3100 mark in the last hour.
As investors assessed the possibility of a BoE rate cut at its upcoming meeting on January 30, the pair failed to capitalize on the previous session’s goodish intraday positive move and witnessed a modest pullback on Thursday.
It is worth recalling that the pair on Wednesday rallied around 120 pips intraday after the CBI’s Quarterly Business Situation Index jumped sharply to +23 in January from -44 in October and marked the stronger level since April 2014.
The change also represented the largest quarterly swing since 1958 and added to the latest optimism led by Tuesday’s stronger-than-expected UK wage growth figures. This eventually forced investors to trim BoE rate cut bets.
However, market concerns that Britain might crash out of the European Union by the end of this year held investors from placing any aggressive bullish bets and kept a lid on any runaway rally for the major, at least for the time being.
This coupled with the prevailing bullish sentiment surrounding the US dollar, further supported by the post-ECB weakness in the shared currency, exerted some additional pressure and contributed to the pair’s downtick over the past hour or so.
Technical levels to watch