GBP/USD: Buyers cheer optimism surrounding Brexit amid political noise
|- Brexit optimism supersedes higher chances of Boris Johnson being the next UK PM.
- EU favors soft Brexit with clear indication to no re-discussion on the deal.
- Politics in the spotlight for fresh directives.
While eco-political catalysts played a major role to flash an upbeat close of the GBP/USD pair yesterday, the Cable managed to remain on buyers list as it seesaws near 1.2725 during the early Asian session on Wednesday.
Out of the many reasons that pleased the British Pound (GBP) bulls on Tuesday, strong average earnings and the opposition Labour party’s likely cross-party motion to prevent a no-deal Brexit gained major attention.
Recently, the UK Telegraph released a news report claiming that remain-backing members of the parliaments (MPs), including a key ally of Michael Gove, will attempt to challenge Boris Johnson’s plans for a no-deal Brexit on the day he launches his campaign to become the next prime minister on Wednesday.
In a separate report conveying the poll, the British media also mentioned that the lead runner in the UK PM race, Boris Johnson, might gain a 140-seat majority at the general election if he becomes Tory leader.
Hence, while Boris Johnson is likely to end the political impasse at the UK, his latest promise to leave the EU with or without a deal on October 31 might be challenged soon.
Global investors are bracing for soft Brexit for now as the EU has also signaled no readiness to discuss the Brexit deal again while the UK lawmakers are also plotting against hard Brexit.
Also important to know that the US inflation numbers could gain more attention amid the lack of British data on the economic calendar.
Technical Analysis
An area comprising recent highs and February low between 1.2760 and 1.2775 may keep limiting the pair’s rise towards April month bottom around 1.2865 whereas 1.2640, 1.2600 and May-end low near 1.2560 can limit the quote’s near-term declines.
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