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GBP/USD rises to 1-1/2 week tops, bulls eyeing a move towards 1.30 mark

  • GBP/USD extended this week’s recovery gains from YTD lows amid weaker USD.
  • Collapsing US bond yields, Fed rate cut speculations weighed heavily on the buck.
  • Investors look forward to the US monthly jobs report for some short-term impetus.

The buying interest around the British pound picked up some pace during the early European session and lifted the GBP/USD pair to 1-1/2 week tops, around the 1.2975 region.

A combination of factors assisted the pair to continue gaining positive traction for the fourth consecutive session on Friday and build on its recent goodish recovery move from YTD lows – set last Friday.

The recent recovery remains unabated

In absence of any negative Brexit-related headlines, the British pound remained well supported by the fact that the Bank of England (BoE) is in no hurry to cut rates in the wake of the global coronavirus outbreak.

It is worth recalling that the incoming BoE Governor Andrew Bailey – while testifying before the UK’s Treasury Committee on Wednesday – said that he would wait for more evidence before deciding on a move.

This coupled with a strong bearish sentiment surrounding the US dollar – amid collapsing US Treasury bond yields and speculations of another Fed rate cut on March 18 – remained supportive of the move up.

The coronavirus-led selloff across global equity markets forced investors to take refuge in the so-called “safe-haven” assets and provided a strong boost to more stable investments – like the US government debt.

The pair has now moved back closer to a key resistance near 50-day SMA, around the key 1.30 psychological mark, as traders now look forward to the US monthly jobs report for some meaningful impetus.

Technical levels to watch

 

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