GBP/USD trims a part of intraday gains, still well bid around 1.3870-75 region

The GBP/USD pair struggled to capitalize on its intraday positive move and retreated few pips from daily tops. The pair was last seen trading around t  |  23/04/2021 10:06
  • GBP/USD regained positive traction on Friday and stalled its recent slide from multi-week tops.
  • The prevalent bearish sentiment surrounding the USD was seen as a key factor lending support.
  • The British pound got an additional boost following the release of upbeat UK PMI prints for April.

The GBP/USD pair struggled to capitalize on its intraday positive move and retreated few pips from daily tops. The pair was last seen trading around the 1.3870-75 region, still up over 0.30% for the day.

The pair managed to regain some positive traction on the last trading day of the week and for now, seems to have stalled this week's retracement slide from the key 1.4000 psychological mark. This marked the first day of a positive move in the previous four and was exclusively sponsored by the prevalent bearish sentiment surrounding the US dollar.

The market now seems convinced with the view that any spike in inflation is likely to be temporary and have been scaling back their expectations for an earlier than anticipated Fed lift-off. This was evident from the fact that the USD bulls largely shrugged off Thursday's upbeat US Jobless Claims data and a modest uptick in the US Treasury bond yields.

The British pound got an additional boost following the release of better-than-expected UK flash PMI prints for April. The preliminary estimate indicated that business activity in both manufacturing and services sector expanded more than anticipated in the current month. This, in turn, allowed the GBP/USD pair to snap three consecutive days of the losing streak.

Despite the supporting factors, the uptick lacked any strong bullish conviction and stalled just ahead of the 1.3900 round-figure mark. Some cross-driven effect stemming from a fresh leg up in the EUR/GBP seemed to be the only factor capping gains for the GBP/USD pair. This makes it prudent to wait for some follow-through buying before positioning for any further gains.

Market participants now look forward to the US economic docket, highlighting the release of flash Manufacturing and Services PMI prints later during the early North American session. This, along with the US bond yields, might influence the USD price dynamics and produce some short-term trading opportunities around the GBP/USD pair.

Technical levels to watch

 

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