GBP/USD awaits Brexit developments on key data week ahead
|- The EU27 delivered a 31 January Brexit deadline extension.
- GBP/USD rests-up between the 50 and 200-hour moving averages in early Asia, traders looking to busy week ahead.
GBP/USD price action is accumulated between the 50 and 200-hour moving averages in early Asia. GBP/USD is currently trading at 1.2857 having climbed from the depths of the 1.28 handle while traders monitored the latest Brexit developments.
Overnight, the EU27 delivered a 31 January Brexit deadline extension with the potential for an earlier date at 30th November and 31st December in a “Flextension”. Subsequently, the Pound was supported and GBP/USD rose 40 pips to 1.2860.
"The UK government’s bill to call an election on 12 December failed to reach the needed 2/3 majority but an early election may well occur anyway as a Liberal Democrat bill is planned to call an election with a simple majority," analysts at Westpac explained. Meanwhile, UK Parliament will resume with a vote expected on a bill to allow for an early election with a simple majority.
A jam-packed end to the month
Looking ahead for the week, besides Brexit risks, the calendar is jam-packed with event risks, namely with the Federal Reserve's interest rate decision and Nonfarm Payrolls at the end of the month. The Fed is expected to cut interest rates and markets are pricing 21 basis points of easing at the 30 October meeting and a terminal rate of 1.27% (vs 1.88% currently), according to analysts at Westpac.
Meanwhile, markets have been buoyed by the sentiment that a trade deal between the US and China is coming along. Overnight, President Trump said the US is ahead of schedule to sign the first phase of a US-China trade deal, reiterating it could be signed in November in Chile and Chinese officials said that parts of the text are “basically completed”.
GBP/USD levels
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