GBP/USD retreats from weekly tops, holds steady around 1.2500 mark
- The intraday short-covering move fails near 1.2520-25 supply zone.
- A modest USD pullback from multi-month lows remained supportive.
- Mixed US economic data failed to provide any meaningful impetus.
The GBP/USD pair quickly retreated around 30-40 pips from weekly tops, albeit has still managed to hold with decent gains just below the key 1.2500 psychological mark.
The pair witnessed some aggressive short-covering move and rallied nearly 100-pips from the early European session lows, taking along some short-term trading stops being placed near the overnight swing high - around the 1.2480-85 region.
The intraday bullish move got an additional boost in the wake of a modest US Dollar pullback from multi-week tops - led by a sharp slide in the US Treasury bond yields, which lifted the pair to fresh weekly highs - near the 1.2520-25 supply zone.
The pair, however, started losing positive momentum in reaction to a slew of resignations by key UK lawmakers - including Chancellor of the Exchequer - Phillip Hammond, though the retracement seemed rather limited, at least for the time being.
On the economic data front, the prelim Markit US services PMI for July came in better than consensus estimates but was largely offset by disappointing manufacturing PMI and thus, failed to provide any meaningful impetus to the greenback.
It would now be interesting to see if the pair is able to capitalize on the recovery move or continues facing some resistance at higher levels amid persistent fears of a no-deal Brexit and ahead of the new UK PM Boris Johnson's speech at No. 10.
Technical levels to watch