- GBP/USD seesaws near one-week high as increasing odds of Tory leadership favor bulls.
- Sluggish risk-tone, overall USD strength tame recovery around 21-day SMA.
- British jobs report, US President Trump’s comments and Fedspeak in the spotlight.
Despite benefiting from the UK’s political optimism, the GBP/USD pair awaits fresh clues from monthly employment numbers while taking the bids to 1.2865 ahead of the London open on Tuesday.
The Brexit party leader Nigel Farage’s step back from 317 constituencies earlier won by Tories increase the odds of another Conservative leadership and smooth Parliament functioning after the United Kingdom’s (UK) departure from the bloc. However, the Times suggests that the Tories want extra safety while urging Mr. Farage to pull candidates from marginal Labour constituencies out of his earlier mentioned 300 polls to contest.
Elsewhere, the US-China trade tension keeps the spotlight while the United States’ (US) meddling in Hong Kong protests awaits China’s response for fresh risk-off.
That said, the market’s risk-tone remains sluggish with the US 10-year treasury yields being around 1.92% with most Asian stocks flashing mixed signals.
Given the presence of monthly employment data on the economic calendar, traders are less likely to look for anywhere else ahead of the release. UK’s September month Average Earnings and Unemployment Rate will join October month’s Claimant Count Change to move the British pound at 09:30 AM GMT. Forecasts suggest mild weakness in Claimant Count numbers amid no change in Unemployment Rate and Average Earnings.
Following the data, speech from the US President and Fedspeak will be closely observed to determine the fate of US-China trade relations and the US Federal Reserve’s future moves respectively.
Technical Analysis
A sustained break above the 21-day Simple Moving Average (SMA) level of 1.2875 could trigger pair’s rise to a three-week-old falling trend-line, around 1.2945 now. On the downside, 1.2770 and 200-day SMA level of 1.2700 limit immediate declines.
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