GBP/USD hides hard Brexit fears beneath USD’s drop
|- GBP/USD remains on the front foot for the fifth consecutive day to the highest since December 19.
- The Brexit party leader Nigel Farage’s former adviser Trixy Sanderson signaled the EU’s preparations for a no-deal departure.
- The market lost interest in the greenback as phase-one calls rise but US-China political divide remains.
GBP/USD takes the bids to 1.3115 while heading into the London open on Monday. Cable fails to portray hard Brexit fears, cited by ex-diplomat, as the US Dollar (USD) keeps declining across the board.
The UK Express recently came out with the news, quoting the Brexit party leader Nigel Farage’s former adviser Trixy Sanderson, that the European Union (EU) is preparing for no-deal as ‘They finally get it’. The ex-diplomat indicated the Sanitary-Phyto Controls, as well as increasing odds for the World Trade Organization (WTO) styled departure, to support the expectations.
On the other hand, China shows readiness to abide by the phase-one conditions. Though, fears of tussle surrounding Taiwan, Hong Kong and Xinjiang keep the pressure on the greenback. Further, increased optimism surrounding commodities and sparse trading conditions also contributed to the pair’s strength.
Market’s risk tone has also been sluggish with the 10-year US treasury yields and S&P 500 trimming the early-day gains.
While the year-end dull trading could keep haunting the traders, second-tier data from the UK and the US may offer intermediate moves to the pair. It’s worth mentioning that trade/Brexit headlines will also play their parts to entertain traders.
Technical Analysis
A daily closing beyond 100-bar Simple Moving Average (SMA) level of 1.3120 can propel prices to 50% and 38.2% Fibonacci retracement levels of its early November-December upside, around 1.3145 and 1.3230 respectively. Meanwhile, sellers will look for entry below 61.8% Fibonacci retracement figure of 1.3055 while targeting the 1.3000 mark.
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