GBP/USD surrenders intraday gains, turns flat around 1.3875-80 region
- GBP/USD witnessed a pullback of over 50 pips from two-day highs, around the 1.3929 area.
- A goodish pickup in the US bond yields underpinned the USD and exerted some pressure.
- The USD bulls seemed rather unaffected by disappointing headline US Durable Goods Orders.
The GBP/USD pair retreated over 50 pips from two-day tops and dropped to the lower end of its daily trading range, around the 1.3875-80 region during the early North American session.
A goodish pickup in the US Treasury bond yields assisted the US dollar to stall its recent decline to the lowest level since early March. This, in turn, was seen as a key factor that failed to assist the GBP/USD pair to capitalize on its intraday positive move, instead prompted some selling around the 1.3930 region.
Meanwhile, the attempted USD recovery seemed rather unaffected by disappointing March US Durable Goods Orders, which recorded a modest growth of 0.5% in March as against the 2.5% rise anticipated. Conversely, orders excluding transportation items matched market expectations and increased 1.6% during the reported month.
The data did little to influence the USD price dynamics, though expectations that the Fed will keep rates low for a longer period held the USD bulls from placing aggressive bets. This should help limit any meaningful decline for the GBP/USD pair as the market focus remains glued to the FOMC policy decision on Wednesday.
In the meantime, the US bond yields will play a key role in influencing the USD price dynamics. Apart from this, the broader market risk sentiment might further drive demand for the safe-haven greenback and produce some short-term trading opportunities around the GBP/USD pair.
Technical levels to watch