GBP/USD eases from daily tops, back below mid-1.2400s
- A broad-based USD weakness assisted GBP/USD to regain some positive traction on Wednesday.
- The intraday uptick faltered ahead of the 1.250 mark, warranting some caution for bullish traders.
- Investors now look forward to the US Q1 GDP report and the FOMC decision for a fresh impetus.
The GBP/USD pair quickly retreated around 40 pips from daily tops, albeit has still managed to hold with modest gains near the 1.2440-45 region.
Following the previous day's sharp intraday pullback of around 100 pips from near two-week tops, the pair managed to regain some positive traction on Wednesday and was being supported by a broad-based US dollar weakness.
The upbeat market mood, as depicted by a bullish trading sentiment around the global equity markets, dented the greenback's traditional safe-haven status and was seen as a key factor lending some support to the major.
The latest optimism over the slowing spread of the coronavirus, a move to re-open economies in some parts of the world and a strong rally in crude oil prices remained supportive of improving global risk sentiment.
However, increasing prospects of an extended lockdown in the UK, coupled with resurfacing concerns about hard-Brexit also took its toll on the sterling and kept a lid on the pair's intraday positive move, at least for now.
Meanwhile, investors now seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of Wednesday's release of the advance US Q1 GDP report and the latest FOMC monetary policy decision.
Hence, it will be prudent to wait for some follow-through selling or a sustained move beyond the key 1.2500 psychological mark before traders start positioning to capture any meaningful intraday momentum play.
Technical levels to watch