GBP/USD fails to hold above 1.27 as market sentiment sours
- Concerns over a new deadlock in trade talks weigh on market sentiment.
- US Dollar Index continues to fluctuate in tight daily range.
- Real GDP in the U.S. expands 3.1% in the first-quarter annually as expected.
In the absence of significant macroeconomic data releases and political developments in the UK, the dollar's market valuation and the market's risk perception is driving the GBP/USD pair's action on Thursday. After reaching a daily high of 1.2725 earlier in the day, the pair reversed its direction in the American trading hours and was last seen trading at 1.2673, losing 0.12% on a daily basis.
Today's data from the U.S. showed that according to the Bureau of Economic Analysis' third estimate, the real GDP in the first quarter expanded by 3.1% on a yearly basis to match the previous reading and experts' estimates. Other data revealed that weekly initial jobless claims rose by 10K to 227K during the week ending June 21 and pending home sales rose by 1.1% on a monthly basis in May.
Following the mixed data releases, the US Dollar Index struggled to make a decisive move in either direction but remains on track to finish the day with modest losses above the 96.20 mark.
Meanwhile, citing a senior administration source familiar with the matter, Reuters reported that the U.S. was unlikely to agree to lift restrictions on Huawei, which according to The Wall Street Journal is a precondition that China requires if they are to reach a deal with the U.S. Moreover, White House adviser Kudlow said that the U.S. could move ahead on additional tariffs on Chinese imports to further weigh on the market sentiment.
On the other hand, British Prime Minister candidate Boris Johnson, who repeatedly said that the UK would leave the EU with or without a deal on October 31, reiterated that it was 'very very unlikely' that parliament would want to extend the Brexit deadline one more time.
Technical levels to watch for