GBP/USD: Resilient ahead of Johnson-Macron meet
|- GBP/USD remains modestly changed after reversing from 21-DMA.
- Upbeat Brexit signals from Germany, the latest negative headlines from France highlights Johnson-Macron meet.
- The British opposition Labour party leader Corbyn keeps preparing to topple UK PM Johnson.
With the traders keenly waiting details of the UK PM Johnson and the French President Macros meeting, GBP/USD trades little changed to 1.2130 while heading into the London open on Thursday.
The UK Prime Minister (PM) Boris Johnson somehow got the positive news from Germany as Chancellor Angela Merkel showed readiness to renegotiate Irish backstop if Britain comes up with a sound alternative within 30 days.
As a result, investors await details of the UK PM Johnson and French President Emmanuel Macron meet. Recent headlines from France, as conveyed by Reuters and The Sun, haven’t been positive as it turns down any renegotiation requests while keeping the UK liable to pay divorce bill of £39billion despite no-deal Brexit.
At home, the opposition Labour party leader Jeremy Corbyn keeps preparing to topple the Tory leader in a no-confidence vote, around early September. The Guardian notes that Mr. Corbyn will gather opposition leaders and Tory rebels at a meeting in parliament next week to discuss the fight against a no-deal Brexit.
On the other hand, the US President Donald Trump takes a U-turn, as usual, to inflate the odds of a trade deal with China while geopolitical tension concerning the Middle East and North Korea keep the risk-tone confined. Adding to the market challenges are the pessimistic comments from German Finance Ministry.
In addition to the UK-France leaders’ meet, the UK CBI Distributive Retail Sales and the US Markit PMI numbers will also entertain short-term traders ahead of the crucial Jackson Hole Symposium that will begin from today.
Technical Analysis
The bullish signal by the 12-bar moving average convergence and divergence (MACD) support the pair’s another run-up to 21-day simple moving average (DMA) level near 1.2160 now. However, 23.6% Fibonacci retracement level of June-August downpour, at 1.2195, and a descending trend-line since late-June near 1.2280 will question buyers then after. Alternatively, 10-DMA level of 1.2100 becomes immediate support ahead of 1.2050 and 1.2015 that holds the key to the pair’s drop to 2017 low near 1.1987.
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