GBP/USD sticks to intraday gains, around 1.2930 region

• A modest USD pullback from multi-year tops helped GBP/USD to gain some traction.
• The intraday uptick was further supported by stronger UK Manufacturing PMI print.
• Fears of a no-deal Brexit warrant some caution before placing any fresh bullish bets.

The GBP/USD pair held on to its intraday gains through the early North-American session and is currently placed near the top end of its daily trading range, around the 1.2935-40 region.

A modest US dollar pullback from multi-year tops helped the pair to gain some positive traction on the last trading day of the week and stage a goodish bounce from near three-month/YTD lows set in the previous session.

GBP/USD supported by a combination of factors

Renewed concerns over the outbreak of the deadly coronavirus triggered a fresh wave of the global risk-aversion trade on Friday. This led to a sharp intraday fall in the US Treasury bond yields and prompted some USD profit-taking.

On the other hand, the British pound got a goodish lift following the release of upbeat UK Manufacturing PMI, which showed that manufacturing output grew at the fastest in 10 months and helped offset a small downward move in the services sector.

Despite a goodish intraday rally of around 70-75 pips, the pair lacked any strong bullish conviction amid persistent worries that Britain might crash out of the European Union at the end of the transition period later this year.

Hence, it will be prudent to wait for some follow-through buying before confirming that the recent GBP weakness might have already run its course and positioning for a further appreciating move, possibly beyond the key 1.30 psychological mark.

Technical levels to watch