- US Dollar (USD) pullback, fresh optimism surrounding Brexit triggers the GBP/USD recovery.
- The UK BRC Retail Sales and trade/political headlines can direct near-term trade sentiment amid lack of scheduled data.
While fresh doubts over the US-China trade truce and the US President Donald Trump’s comments triggered the USD’s early-day pullback to 1.2530, expectations of a soft Brexit help the GBP/USD pair to stop declining further ahead of the London open Monday.
The Cable dropped heavily on Friday after the US Nonfarm Payrolls dimmed prospects of increased monetary easing from the US Federal Reserve. Also, uncertainty surrounding the Brexit added further weakness into the pair.
However, President’s Donald Trump’s criticism to the Fed’s monetary policy tightening and fresh concerns about the less likeliness of a trade deal between the US and China, from Chinese media, triggered the greenback’s dip profit booking amid early Asian session.
On the other hand, former Brexit Secretary Dominic Raab and an influential Troy member Rory Stewart are tightening their belts to confront the UK Prime Minister (PM) candidate Boris Johnson if at all he wins the PM race.
The front runner clings to his previous pledge of crashing out of the EU, be it with or without a deal, but Dominic Raab threatens to adjourn the Parliament if he fails to get enough support for no-deal Brexit proposal. Additionally, Rory Stewart opens the gate to bypass the decision-making body and form an “alternative parliament” with a retired speaker to back the UK’s soft exit from the block.
Although latest clues from Britain have been increasing the odds for a soft Brexit, it is still in the nascent stage to confirm anything as uncertainty surrounding the PM’s race looms large. Elsewhere, trade talks between the US and China will gain momentum during this week; though, few expect a deal to take place amid differences on both the sides.
Furthermore, UK BRC Like-For-Like Retail Sales (YoY) is expected to increase +0.8% from -3.0% decline in June.
Technical Analysis
Not only 1.2610 but June 27 low near 1.2660 also challenges the Cable’s recent U-turn, which highlights the importance of December 2018 low surrounding 1.2480, the year 2019 bottom close to 1.2440 and 1.2400 round figure.
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 stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.