GBP/USD continues to fluctuate in tight range above 1.26
- GBP/USD struggles to find direction on Thursday.
- US Dollar Index stays below the 97 mark.
- Business confidence in the UK continues to deteriorate.
The GBP/USD pair is trading in a relatively tight range on Thursday amid a lack of fresh fundamental drivers and thin holiday trading conditions. As of writing, the pair was was virtually flat on the day at 1.2635.
Earlier today, a report published by the Insitute of Directors (IoD) showed that the business confidence in the UK slumped to its lowest level in more than a year dragged lower by Brexit uncertainties. According to Reuters, commenting on the report, "Business leaders are looking ahead to the new year with trepidation about the economy. While we saw cautious optimism emerging when the Brexit talks appeared to be moving towards a transition period after March 2019, that has utterly dissipated now. The prospect of a no-deal in the near future will be weighing heavily on directors’ minds,” said IoD senior economist Tej Parikh.
On the other hand, the greenback's market valuation continues to be impacted by the Treasury bond yields and the risk perception. Following yesterday's more-than-2% rally, the 10-year T-bond yield reversed its direction and was last seen losing 0.65% on the day while the US Dollar Index was down 0.15% at 96.85. In the early NA session, weekly jobless claims and consumer confidence data will be looked upon for fresh impetus.
Technical levels to consider
The immediate resistance for the pair aligns at 1.2650 (20-DMA) ahead of 1.2740 (Dec. 24 high) and 1.2785 (50-DMA). On the downside, supports align at 1.2615 (daily low), 1.2560 (Dec. 16 low) and 1.2500 (psychological level/Dec. 10 low).