GBP/USD recovers early lost ground, holds steady above 1.3800 mark post-US data
- A modest USD pullback assisted GBP/USD to attract some dip-buying on Tuesday.
- Disappointing US Durable Goods Orders data did little to impress the USD bulls.
- A declining trend in Delta variant cases in the UK acted as a tailwind for the sterling.
The GBP/USD pair managed to recover over 50 pips from the daily swing lows and climbed to the top end of its intraday trading range during the early North American session. The pair held steady around the 1.3815-20 region and had a rather muted reaction to the US macro data.
The US dollar struggled to preserve its intraday gains amid a sharp intraday decline in the US Treasury bond yields. Apart from this, a modest bounce in the US equity futures further undermined the safe-haven greenback, which, in turn, was seen as a key factor that assisted the GBP/USD pair to attract some dip-buying on Tuesday.
The USD remained on the defensive following the release of softer-than-expected US Durable Goods Orders data for the month of June. In fact, the headline orders recorded a modest 0.8% growth in June as against 2.1% anticipated, though was offset by an upward revision of the previous month's reading to show a 3.2% rise.
On the other hand, the British pound was supported by a declining trend in Delta variant infections in the UK. In fact, Britain recorded 24,950 new cases on Monday, down for the sixth successive day and well below the 54,674 reached on July 17. This, to a larger extent, overshadowed the impasse over the Northern Ireland Protocol.
Tuesday's US economic docket also features the release of the Conference Board's Consumer Confidence Index. The data, however, is unlikely to provide any meaningful impetus as the focus remains on the FOMC monetary policy meeting. The outcome will influence the USD in the near term and help determine the near-term trajectory for the GBP/USD pair.
Technical levels to watch