GBP/USD remains confined in a range, around mid-1.2500s
- GBP/USD was seen oscillating in a range through the early European session on Friday.
- The emergence of some fresh selling around the USD extended some support to the pair.
- Some cross-driven weakness stemming from a strong move up in EUR/GBP capped gains.
The GBP/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the first half of the trading action on Friday.
Following some good two-way price moves witnessed over the past couple of trading session, the GBP/USD pair now seems to have stabilised and was seen oscillating in a range near mid-1.2500s. The downside remained cushioned on the back of some renewed US dollar selling bias, though the uptick lacked any strong bullish conviction.
Despite growing fears of a surge in coronavirus infection, hopes of a potential vaccine for the highly contagious disease revived investors' appetite for perceived riskier assets. The risk-on flow was evident from a positive tone surrounding the equity markets, which, in turn, undermined demand for the safe-haven greenback.
The USD was further pressured by a goodish pickup in the shared currency, which remained supported by the optimism over a deal on the EU's proposed package. Investors remain convinced that the European leaders will make progress in agreeing on a €750 billion coronavirus recovery fund, aimed at aiding the region’s worst-hit economies.
However, some cross-driven weakness, stemming from a strong bid tone surrounding the EUR/GBP cross, held investors from placing any aggressive bullish bets. This, in turn, was seen as one of the key factors that kept a lid on any meaningful upside for the GBP/USD pair, at least for the time being.
Market participants now look forward to the US economic docket, featuring the release of housing market data and Prelim Michigan Consumer Sentiment Index. The data, along with the broader market risk sentiment might influence the USD price dynamics and produce some trading opportunities on the last day of the week.
Technical levels to watch