gbp-british-pound-coin - GBP
  • GBP/USD rapidly rebound from a mid-European session drop to below1.2700
  •  Brexit optimism added support to the pound
  • Coronavirus nerves buoyed USD and limited the upside.
  • The GBP/USD trades flat just below 1.2750 after rallying 50 points.

GBP/USD shows resilience below 200-day SMA and is rebounding from below-1.2700 levels. The recent spike came following upbeat Brexit comments.

The UK PM’s spokesman confirmed that they are working hard to agree a deal with the EU. The spokesman added that the UK has productive exchanges with the EU over recent weeks and is working together with the EU on N.Ireland Brexit protocol.

The UK will strengthen pandemic restrictions if needed. global risk sentiment soured boosting the US Dollar on safe-haven flows and limiting upside for the GBP/USD pair.

Renewed optimism for US fiscal stimulus measures was brief, overshadowed by second wave covid fears and the threat to the economic recovery which weighed on the market sentiment.

Will GBP/USD  capitalize on the bounce or will bears take back control? Either way GBPUSD is set to end the week lower.

Durable Goods Orders are in focus later and risk sentiment could also influence the USD.