- GBP/USD snaps two-day winning streak as the US dollar benefits from broad risk-off.
- The UK PM Johnson to renew fears of no-deal Brexit, PMI data could clear BOE’s hawkish stance.
- Headlines concerning China’s coronavirus and Brexit could entertain traders coupled with the UK and US PMIs.
GBP/USD declines from multi-day top to 1.3165 while heading into the London open on Monday. The pair recently declined amid fears of hard Brexit while the US dollar’s safe-haven demand also weighed on prices. Traders will now concentrate on the US/UK PMIs as well as the UK PM Boris Johnson’s speech for fresh impulse. Though, updates concerning China’s coronavirus could keep the driver’s seat.
Earlier during the Asian session, The Guardian released excerpts on the UK PM’s speech that will be delivered to ambassadors and businesspeople on Monday morning in Britain. “There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar any more than the EU should be obliged to accept UK rules,” will be the Tory leader’s remarks as mentioned by the news.
Chatters were also making rounds that the UK will be agreeing to the EU’s no border checks’ proposal. Though, The Sun’s article poured cold water on the face of such expectations while mentioning a mild rift between the Irish PM Leo Varadkar and UK’s Dominic Raab.
On the other hand, China’s return from the Lunar New year holidays also contributed to the market’s risk-off, not to forget a welcome with disappointing data from Beijing. As a result, the US 10-year treasury yields remain sluggish around 1.525% whereas stocks in Asia had to bear the burden of Chinese equities sell-off worth 9%.
Other than the UK PM’s speech, the final reading of January month British Manufacturing PMI, as well as the US market Manufacturing PMI and ISM Manufacturing PMI, will be on the traders’ radar. As per the British PMI, the activity gauge is expected to confirm the initial 49.8 mark but could boost the cable if manage to cross 50.00. On the flip side, US numbers are likely provide better results and may add strength into the greenback.
Technical Analysis
Buyers will look for entry beyond 23.6% Fibonacci retracement of its October-December 2019 upside, at 1.3205, whereas a confluence of 21 and 50-day SMAs near 1.3080/90 now grabs the sellers’ attention.
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.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.