The GBP/USD pair stalled early European session recovery move near the key 1.30 psychological mark and is now headed back to the lower end of daily trading range.
After an initial reaction to the news of a suspected terrorist attack in the city of Manchester, the pair caught some fresh bids near mid-1.2900s. The up-move, however, turned out to be short-lived and the pair once again failed to ran through some fresh offers at higher level as investors seemed concerned over the implication of the uneventful terror attack and whether it could delay the upcoming UK general elections scheduled on June 8th, especially after the UK PM Theresa May suspended the election campaign.
Meanwhile, sentiment surrounding the British Pound seems to have turned negative amid renewed worries over impending Brexit negotiations following UK Brexit Minister David Davis comments to walk away without any talks if the country faces €100 billion massive divorce bill as claimed by the EU officials.
Adding to this, downbeat UK public sector net borrowing data also weighed on the streling and collaborated to the pair’s slide back to 1.2970-65 region. Despite of its pull-back, the pair has held within Friday’s trading range as persistent US Dollar selling interest seems to be limiting any immediate sharp downslide for the major.
Moving ahead, today’s US economic docket featuring the release of PMI prints, new home sales data and Richmond Manufacturing Index would now be looked upon for short-term momentum play.
Valeria Bednarik, Chief Analyst at FXStreet writes: “The wide range the pair has to move in between is 1.2830/1.3060, and unless one of those extremes gives up, range trading will persist. Short term, 1.2950 is the immediate support, followed by 1.2910 and 1.2880. To the upside, 1.3020 is the first resistance, en route to 1.3060.”