- The GBP/USD buyers cheering USD weakness, receding political uncertainty confront the sellers following profit-booking moves amid lack of fresh catalysts.
- No major data from the UK highlights political plays and the US statistics as the main directives to watch.
With the storm around global financial markets taking a halt after the central bankers’ bearish appearances and the end of the initial selection process for the UK’s PM, the GBP/USD pair cling to 1.2700 during the early Asian session on Friday.
The quote yesterday rose to the highest in more than a week’s time after the market rush towards ex-US Dollar (USD) currencies after the US Federal Reserve cited chances of a rate cut during this year after refraining from it for long.
Investors showed little reaction to weaker than expected growth of the UK retail sales and the Bank of England’s (BOE) downgraded forecast for the second-quarter gross domestic product (GDP).
Further, the BOE Governor Mark Carney refrained from providing any fresh clues to the future monetary policy moves but didn’t turn down Brexit uncertainty during his latest public appearances.
At the political front, Conservatives have finally put forward two candidates, namely Boris Johnson and Jeremy Hunt, for the Prime Minister’s (PM) post. They both will begin their official campaign to lure 160K Tory voters that will decide the winners. The final result will be rolled out on July 22 from where the new leader will take over residual intermediate duties of the present PM, though on paper only, Theresa May.
Looking forward, the British Pound (GBP) traders may have fewer catalysts to follow and the political plays might also take a halt after a heavy run in recent days. However, few second-tier data from the US and global political moves might entertain the momentum traders during the rest of the day.
Technical Analysis
A successful break over six-week long descending trend-line enables buyers to claim month’s high around 1.2765 and 50-day SMA level of 1.2830 but a failure to hold the strength for long, together with a downside break of 1.2660, can recall 1.2610 and 1.2580 back to the chart.
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