Sterling is hovering in the middle of its NorAm range by 1.2537, above its overnight low by 1.2455 nL1N2DS0LM.
Guarded optimism over EU-UK trade negotiations, with Johnson due to speak with Commission President Von der Leyen nS8N2DM05Q and others, is relieving Brexit pressure on sterling. Lack of momentum toward a trade resolution has hindered sterling amid the ebb and flow of COVID-19 concerns.
The GBP net-short IMM spec position nL1N2DP24C diminished in the June 3-9 period 1096742NNET. However, sterling weakness since then may have led to arebound in the net short, with stalled EU-UK negotiations, negative-rates BoE speculation and second-wave coronavirus fears all in play.
GBP/USD is finding support in the mid-1.24s, just ahead of the 21-DMA by 1.2442 and 55-DMA by 1.2410.
A break below the 55-DMA would put 1.2307, the 50% Fib of the 1.3200-1.1413 range, in sharper focus.
Below 1.2307, bears would gain momentum for a test of the May 18 low at 1.2075 and potentially COVID-19 lows by March's 1.1413 low.
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