GBP/USD: Brexit fears question buyers ahead of UK Manufacturing PMI

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.