GBP/USD benefits from UK’s receding political uncertainty
- Optimism surrounding the break of political impasse pleases the cable buyers.
- Speech from BOE’s Carney and the US retail sales can offer fresh impulse.
Not only shrinking numbers to the UK PM’s race, but the news of failed candidates to support the remaining ones also signal receding political uncertainty at the UK which in turn favors GBP/USD towards 1.2680 during early Friday.
At the end of Thursday’s first round of Conservative voters to decide on the Tory leadership and also the next Prime Minister of the UK, only 7 candidates remain in the race while 3 got rejected due to failure of getting lesser than 15 required votes.
While a lesser number of candidates gives a bit more clarity over the issue, some of the exiting Tories like Andrea Leadsom recently announced their support to the remaining players, Sajid Javid in her case.
The news was also taking rounds that the Matt Hancock, who is still in the race with 20 votes, might as well exit on Friday whereas few others are heading up to support Boris Johnson.
On the other hand, rising political tension between the US and Iran, coupled with lack of positive news concerning the US-China trade stalemate, keeps a drag on the US Dollar (USD) that has recently been under pressure.
In addition to the global political plays, scheduled speech from the Bank of England (BOE) Governor Mark Carney and the US retail sales (expected 0.4% v/s 0.0%) could also entertain momentum traders for rest of the day.
Technical Analysis
With 1.2640 and 1.2560 limiting the quote’s decline towards December 2018 low around 1.2480, chances of the pair’s U-turn to 1.2760 and 1.2865/75 region including April low and 50-day simple moving average (SMA) can’t be denied.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
