GBP/USD approaches 1.2300 as Brexit woes battle softer USD ahead of US Consumer Confidence


  • GBP/USD regains upside momentum after Monday’s lackluster performance.
  • UK lawmakers back Northern Ireland Protocol Bill in first of many parliamentary tests.
  • US dollar struggles to regain market confidence amid lack of major data/events.
  • BOE’s Cunliffe, US CB Consumer Confidence to direct intraday moves, Wednesday’s ECB Forum is the key.

GBP/USD grinds higher around the intraday top near 1.2285, following a sluggish start to the week, as buyers cheer the US dollar weakness during Tuesday’s Asian session. In doing so, the Cable pair ignores recent negative news surrounding Brexit, as well as the UK’s political jitters.

That said, the UK policymakers in the House of Commons voted in favor of the Northern Ireland Protocol (NIP) Bill late Monday. Even if the NIP has multiple hurdles to cross before becoming legislation, the European Union’s (EU) trade warnings make the latest passage a grim event for the GBP/USD traders. “Despite some fierce criticism, lawmakers voted 295 to 221 in favor of the Northern Ireland Protocol Bill, which would unilaterally overturn part of Britain's divorce deal from the EU agreed in 2020. The bill now proceeds to line-by-line scrutiny,” said Reuters.

The Brexit move appears a political play to defend UK Prime Minister (PM) Boris Johnson’s position after criticism of the patygate scandal, as well as the Conservatives’ defeat in the recently held two parliamentary by-elections.

Alternatively, the US Dollar Index (DXY) stays pressured at around 103.95 after declining for the last two consecutive days. It’s worth noting that mixed US data, as well as the quarter-end positioning, could be linked to the latest weakness of the greenback.

On Monday, US Durable Goods Orders rose to 0.7% in May, versus 0.1% expected and 0.4% prior. That said, the widely tracked Nondefense Capital Goods Orders ex Aircraft also cross 0.3% market forecasts and previous readings to increase by 0.5% during the stated month. Further, the US Pending Home Sales also surprised the USD bulls with 0.7% MoM figures for May versus -3.7% expected and -4.0% prior. The YoY figures, however, came in negative to -13.6% versus -9.8% prior. Further, Dallas Fed Manufacturing Business Index for June dropped to the lowest level since May 2020, to -17.7 versus -3.1 forecasts and -7.3 prior.

Meanwhile, risks emanating from Russia and China appear to weigh on the market’s mood and test the GBP/USD buyers of late. Among them, the chatters surrounding the North Atlantic Treaty Organization (NATO) nations to take a tough stand on China and Russia are the major challenges. On the same line is Moscow’s first default since 1918.

While portraying the mood, the S&P 500 Futures print mild gains while the US 10-year Treasury yields probe a two-day rebound around 3.19% by the press time.

Looking forward, more updates on Brexit and global recession fears are likely to direct GBP/USD moves ahead of a speech from the Bank of England’s (BOE) Deputy Governor for Financial Stability Sir Jon Cunliffe. Also important to watch is the US CB Consumer Confidence for June, prior 106.4. Above all, Wednesday’s ECB Forum is the key as major central bankers from the BOE and the Fed are scheduled to debate the monetary policies.

Technical analysis

GBP/USD remains firmer beyond convergence of the 50-SMA and a fortnight-long support line, near 1.2255 by the press time. However, the 100-SMA hurdle on the four-hour chart, near 1.2310 by the press time, limits the short-term advances of the pair buyers.

Additional important levels

Overview
Today last price 1.2277
Today Daily Change 0.0011
Today Daily Change % 0.09%
Today daily open 1.2266
 
Trends
Daily SMA20 1.2356
Daily SMA50 1.2467
Daily SMA100 1.2859
Daily SMA200 1.3184
 
Levels
Previous Daily High 1.2332
Previous Daily Low 1.2238
Previous Weekly High 1.2324
Previous Weekly Low 1.2161
Previous Monthly High 1.2667
Previous Monthly Low 1.2155
Daily Fibonacci 38.2% 1.2274
Daily Fibonacci 61.8% 1.2296
Daily Pivot Point S1 1.2225
Daily Pivot Point S2 1.2184
Daily Pivot Point S3 1.2131
Daily Pivot Point R1 1.232
Daily Pivot Point R2 1.2373
Daily Pivot Point R3 1.2414

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD edges lower toward 1.0100 after dismal EU sentiment data

EUR/USD edges lower toward 1.0100 after dismal EU sentiment data

EUR/USD has extended its daily slide below 1.0150 after the data from Germany and the EU showed that the Economic Sentiment Index component of the ZEW Survey continued to decline in August. Investors await July housing data from the US.

EUR/USD News

GBP/USD extends slide toward 1.2000 after UK data

GBP/USD extends slide toward 1.2000 after UK data

GBP/USD came under renewed bearish pressure in the early European session amid risk aversion on Tuesday and declined toward 1.2000 before staging a modest rebound. The data from the UK showed that the ILO Unemployment Rate remained unchanged at 3.8% in June.

GBP/USD News

Gold struggles to recover above $1,780

Gold struggles to recover above $1,780

Following a consolidation phase above $1,780 in the Asian session, gold lost its traction and declined toward $1,775. The benchmark 10-year US Treasury bond yield holds in positive territory near 2.8%, making it difficult for XAU/USD to gather recovery momentum.

Gold News

Bitcoin price all but confirms a bearish breakout amid opposing on-chain metrics

Bitcoin price all but confirms a bearish breakout amid opposing on-chain metrics

Bitcoin price shows a confluence of bearish developments that suggests an incoming downtrend. This development could halt the bullish outlook seen in Ethereum and other related altcoins. Bitcoin price is in a classic Wyckoff Distribution Phase.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures