GBP/USD sits near session tops, above 1.2200 handle ahead of US GDP
- Suspension of UK parliamentary proceedings kept the GBP bulls on the defensive.
- A modest USD uptick further adds to the weaker tone; downside remains limited.
- Investors now look forward to the revised US Q2 GDP print for short-term impetus.
The GBP/USD pair reversed an early dip to 1.2180 area and is currently placed at the top end of its daily trading range, comfortably above the 1.2200 handle.
The recent UK political development, wherein the Queen of England on Wednesday approved the UK PM Boris Johnson's plan to suspend Parliament until October 14, limited the time to debate the Brexit process and increased the likelihood of a hard-Brexit, which kept the British Pound on the defensive.
Brexit headlines continue to influence the GBP price dynamics
The pair was further pressurized by a modest pickup in the US Dollar demand, which gained some traction on the back of some positive trade-related comments from China but lacked any strong bullish conviction amid the recent inversion of the US bond yield curve and helped limit the downside.
Meanwhile, the latest leg of an up-move of around 30-40 pips over the past hour or so came after the UK opposition Labour Party’s Finance policy Chief and the second most powerful man - John McDonnell said that they will use every mechanism they can to stop a no-deal Brexit.
It, however, remains to be seen if the pair is able to capitalize on the recovery move or meets with some fresh supply at higher levels on the back of growing fears of a no-deal Brexit on October 31. Market participants now look forward to the release of revised US Q2 GDP growth figures for some short-term impetus.
Technical levels to watch