GBP/USD: Sellers dominate ahead of Carney’s speech, Conservative voting
|- Political pressure heats up ahead of Tory voting where 6 candidates will be voted for the UK PM’s post.
- Carney’s speech will also be examined considering recent economic pessimism.
Bears continue to hold the reins of GBP/USD amid political pessimism as the pair trades near 1.2530 before flashing the fresh five-month low ahead of the second round of voting for the Tory leadership and Carney’s speech.
Doubts over who will replace the present PM Theresa May and renewed pessimism surrounding the UK economy, due to likely hard Brexit, initially weakened the Cable.
The downturn was recently carried forward after the British Finance Minister Philip Hammond conveyed his disagreement with the PM May’s spending plans by showing readiness to resign.
Investors may now emphasize the outcome of conservative voting, Bank of England (BOE) Governor Mark Carney’s speech at the ECB Forum in Sintra and the US housing market numbers for fresh impulse.
While each of the remaining 6 candidates requires a minimum of 33 votes to opt for tomorrow’s voting round, Boris Johnson seems to have less problem with that as he got 114 votes during the first round. However, the question will be on who can join him for the contest.
Following the poll results, the BBC will hold a debate between the candidates and unlike the previous one Mr. Johnson has shown readiness to attend it.
In the case of the ECB Forum, BOE’s Carney might highlight Brexit risk but is less likely to signal any deviation from present policy path.
In the end, the US May month housing numbers are likely to portray an upbeat scenario as building permits could remain unchanged at 1.290 million while housing starts may rise to 1.240 million against 1.235 million prior on a monthly basis.
Technical Analysis
With the 14-day relative strength index (RSI) signaling oversold conditions, pair’s uptick beyond May low of 1.2560 can trigger fresh advances towards 1.2660 and 1.2710 numbers to the north. On the other hand, December 2018 low near 1.2480 and the year 2019 bottom around 1.2430 seems next on the bears’ radar during further downside.
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