GBP/USD lingers over trade/political news, UK Retail Sales in focus
|- GBP/USD struggles to justify increasing odds of a Tory leadership and overall USD strength.
- Nigel Farage rejects Tory offer to reduce Brexit party candidates, polls keep favoring the UK PM.
- US-China trade pessimism turns severe.
Optimism surrounding the UK’s political plays confronts the broad US dollar (USD) strength ahead of the British Retail Sales data for October. That said, the GBP/USD pair takes rounds to 1.2840 while heading into the London open on Thursday.
Brexit party leader Nigel Farage’s rejection of the Conservative’s request of standing down more than 317 candidates, earlier promised, could negatively affect the British Prime Minister (PM) Boris Johnson’s popularity. The United Kingdom’s (UK) PM Johnson was recently hackled during a speech to the flood-affected area. Though, polls concerning December election keep showing Tories holding the power.
On the other hand, uncertainty surrounding the US-China trade deal gets murkier after the former’s transit in Taiwan waters, as cited by China’s Global Times. Previously, the Wall Street Journal (WSJ) spotted China’s refrain from mentioning the figures of the United States (US) farm imports in the deal as the current deadlock. Also contributing to the risk-tone is escalating protests in Hong Kong for the fourth consecutive day. As a result, bonds are on the hike while Asian equities decline further.
The Federal Reserve (Fed) Chairman Jerome Powell, during his first day of Testimony, repeated previous statements conveying economic optimism while also praising the current monetary policy. The same could be witnessed in the latest Fedspeak.
Moving on, October month UK Retail Sales may please the cable buyers if matching upbeat forecasts. However, the market’s rush to risk-safety can magnify the USD gains if the Fed Chair support upside momentum during his Testimony 2.0.
Technical Analysis
Repeated pullbacks from 21-day Simple Moving Average (SMA), at 1.2877 now, drag the quote to 23.6% Fibonacci retracement of September-October upside, at 1.2765, by the press time.
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