GBP/USD bounces off weekly lows, back around 1.2900 mark ahead of US macro data

• GBP/USD comes under some pressure after the UK’s mandate on Brexit talks.
• The prevailing USD selling extended some support and helped bounce off lows.

The GBP/USD pair dropped to fresh weekly lows, around the 1.2860 region in the last hour, albeit managed to recover few pips thereafter.

The pair failed to capitalize on its early uptick to the 1.2945 region and took a turn for the worst after the UK published its Brexit negotiating mandate earlier during the European trading session.

Weaker USD helped limit deeper losses

According to the UK's guidelines for negotiations, the British Prime Minister Boris Johnson could walk away from trade talks in June unless there is the "broad outline" of an agreement.

Against the backdrop of a deep division between the two sides, the deadline for progress and threat to walk away on WTO rules turned out to be a key factor that weighed on the British pound.

On the other hand, the US dollar witnessed some follow-through weakness and extended its recent pullback from multi-year tops amid a slump in the US Treasury bond yields to fresh all-time lows.

Persistent USD selling helped limit deeper losses, rather assisted the pair to rebound around 40 pips from daily lows. The pair moved back closer to the 1.2900 mark ahead of important US macro releases.

Thursday's US economic docket highlights the release of revised Q4 GDP growth figures and durable goods orders data, which might influence the USD price dynamics and provide some impetus.

Technical levels to watch