GBP/USD rebounds swiftly from 1-week lows, still in the red below 1.3000 mark

• GBP/USD found some support ahead of the 1.2900 mark and witnessed a short-covering move.
• A broad-based USD strength and Brexit uncertainties kept a lid on the pair’s attempted recovery.

The GBP/USD pair rallied around 100 pips from the daily swing lows, albeit seemed struggling to find acceptance above the key 1.3000 psychological mark.

The pair extended its recent pullback from the 1.3175 region and continued losing ground through the mid-European session on Wednesday. The steep decline marked the fourth day of a negative move and was exclusively sponsored by a broad-based US dollar strength.

Investors remain concerned that imposition of fresh lockdown measures to curb the second wave of COVID-19 infections could hinder the tepid global economic recovery. This, in turn, took its toll on the global risk sentiment and triggered a selloff in the equity markets.

The anti-risk flow provided a strong boost to the safe-haven greenback, which was seen as one of the key factors that continued exerting some pressure on the GBP/USD pair. The USD bulls seemed rather unaffected by the uncertainty about the outcome of the US election.

It is worth reporting that polls have been indicating a lead for the Democratic candidate Joe Biden over incumbent President Donald Trump. Investors, however, remain wary on the back of a narrow gap in key swing states and the possibility of the outcome being contested.

On the other hand, the British pound was undermined by persistent Brexit-related uncertainties amid the impasse on the matter of the future access of EU fishing fleets to UK waters. This, along with some technical selling below the 1.2990 level aggravated the intraday bearish pressure.

The GBP/USD pair, however, managed to find some support ahead of the 1.2900 mark and witnessed some aggressive short-covering move during the early North American session. The attempted bounce lacked any obvious fundamental catalyst and is more likely to remain limited.

Technical levels to watch