GBP/USD eyes 1.2500 despite Brexit woes, US NFP in focus
|- GBP/USD keeps recovery moves from 1.2461 to portray a three-day winning streak.
- US dollar weakness ahead of the key employment figures favors the Cable to remain strong.
- German Chancellor suggests preparing for no-deal Brexit, more than 12,000 British people to lose their job in two days.
- Brexit and virus updates might offer intermediate clues while major attention will be given t the US NFP.
GBP/USD takes rounds to 1.2485, up 0.06% on a day, while heading into the London open on Thursday. The Cable recently benefited from the US dollar’s sluggish moves ahead of the key US jobs report for June. However, Brexit woes and fears of more job losses in the UK have guarded the quote’s immediate upside.
The lack of agreement over the key Brexit issues pushed German Chancellor Angela Merkel to say, “The European Union (EU) needs to be prepared for the possibility that they may not be able to reach an agreement with the United Kingdom (UK).” This highlights the downbeat performance of the EU-UK departure talks in Brussels. Also acting as the Brexit-negative sign could be the news from the UK Express signaling that more than 300 EU boats will be considered as an invasion of British waters after no-deal departure.
Elsewhere, the BBC came out with the headlines saying that more than 12,000 people in the UK are set to lose their jobs after a raft of firms announced cuts in the past 48 hours. Furthermore, the UK’s readiness to ease citizenship rules for Hong Kong residents gained ire from China.
Market’s risk-tone sentiment struggles for a clear direction amid the US-China tussle and the worries for the coronavirus (COVID-19) second wave in America. The US pressed sanctions on Beijing, due to the passage of Hong Kong security law, whereas the dragon nation placed watch on the four American media firms operating in China. Furthermore, Reuters came out with the news suggesting that the daily virus cases in America rose more than 48,000 on Wednesday. This becomes the highest number since the pandemic started, the news said.
Other than the mixed risk catalysts, the market’s worry ahead of the key US jobs report also increases the strength of the pre-NFP trading lull. However, the US dollar remains on the back foot for the fourth consecutive day. That said, the US dollar Index (DXY), a gauge of the greenback versus the major currencies, presently drops to 97.10, down 0.05% on a day.
With the Brexit pessimism and fears of further job losses in the UK likely to keep the GBP/USD pair’s near-term upside guarded, expectedly strong figures of the US NFP and Unemployment Rate might recall the sellers.
Read: US Non-Farm Payrolls June Preview: The delicate art of prediction
Technical analysis
Unless declining back below 100-day SMA level of 1.2460 bulls keep June 24 top near 1.2545 on the radars. Alternatively, the falling trend line from June 16, at 1.2400 now could satisfy sellers past-1.2545.
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