GBP/USD stays under pressure ahead of UK Supreme Court hearings
|- GBP/USD extends pullback from 100-DMA amid Brexit uncertainty.
- The UK Supreme Court will start three-day hearings on whether PM Johnson broke the law while proroguing the Parliament.
With no positive Brexit developments and an on-going Parliament deadlock at the UK, the GBP/USD pair carries latest profit-booking to 1.2410 while heading into the London open on Tuesday.
The United Kingdom’s (UK) Prime Minister (PM) Boris Johnson’s Luxembourg visit failed to provide any key updates. The EU President criticized the Tory leaders’ depth of details while British Foreign Secretary Dominic Raab reiterated the PM”s pledge to leave on October 31 and also passing the bucket of criticism back to the EU. Further, Mr. Johnson refrained from the press conference with the Luxembourgish counterpart and got additional down-point in turn.
On the other hand, the US Dollar (USD) stays on the front foot as the recent rise in safe-haven demand, mainly due to the attacks of Saudi Arabia, joins hands with optimism surrounding the US-China trade talks, up for early October. Recent communication from Chinese Commerce Ministry confirmed the Finance Minister Liao Min’s visit to the US on Wednesday to pave the way for October discussions. On the negative side, the US arrested Chinese government official for visa fraud.
Moving on, the British Supreme court will hear arguments on the case against the UK PM stating that Mr. Johnson acted unlawfully while proroguing the parliament. The Scottish and London courts gave diverse judgments and make the case even more crucial. The hearings will last for three days in front of 11-judges presided by Lady Hale.
While the absence of data, except the US Industrial Production for August, is likely in support of carrying the previous move forward, any positive to the UK PM during the first day of hearings at the UK’s Supreme court could help the Cable recover some of its latest losses.
Technical Analysis
Unless providing a daily closing beyond 100-day simple moving average (DMA) level near 1.2510, the quote is less likely to rise towards mid-July highs surrounding 1.2580, which in turn highlights the importance of 1.2380 and 50-DMA level of 1.2280 during further declines.
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