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GBP/USD once again fails near 1.2300 mark, turns neutral

  • GBP/USD stalled its recent bullish trajectory and faced rejection near 1.2300 mark.
  • Concerns over the rapid spread of coronavirus in the UK weighed on the sterling.
  • A modest pickup in the USD demand further collaborated towards capping gains.

The GBP/USD pair continued with its struggle to make it through the 1.2300 round-figure mark and quickly retreated around 100-pips in the last hour.

The latest leg of a sudden fall over the past hour or so followed the news that the UK Prime Minister Boris Johnson had been testing positive for the coronavirus. The headlines fueled fears over the rapid spread of the virus, which took its toll on the British pound and exerted some pressure.

Apart from this, a modest pickup in the US dollar demand further contributed towards capping the upside, rather prompted some selling at higher levels. The greenback stalled its week-long bearish trend and managed to gain some traction in the wake of the prevalent cautious mood.

Despite the latest optimism over a massive $2.2 trillion US stimulus package, concerns about an imminent global recession continued weighing on investors' sentiment. This was evident from a weaker tone around the equity markets, which benefitted the greenback's safe-haven status against its British counterpart.

Given this week's strong rally of over 850 pips from the vicinity of 35-year lows, traders further seemed inclined to take some profits off the table on the last trading day of the week. Hence, it will be prudent to wait for some strong follow-through selling, possibly below the Asian session swing lows, around the 1.2130 region, before positioning for any further intraday slide.

Technical levels to watch

 

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