- The Cable manages to ignore domestic political uncertainty and Brexit drama as macro trade headlines grab major attention.
- The UK’s Parliament will start discussing Brexit proposal from next week while the economic calendar may also offer active market session till then.
Despite political hardships at the UK, the GBP/USD pair remains modestly positive to trade near 1.2810 while heading into the London open on Friday. While trade headlines are all in the limelight, for now, global political developments and second-tier data from the UK and the US could entertain momentum traders during the rest of the day.
The US Dollar (USD) retreated from its latest up-moves after the US President Donald Trump added worries for the global trade watchers. This time President Trump took aim at Mexico by levying 5% tariffs to limit illegal migration. He has already warned to increase the duties until 25% by October if Mexico fails to solve the problem.
The Cable took advantage of the greenback’s weakness despite growing political pessimism at home.
With the majority of the British lawmakers selling their plans to become the next Prime Minister, Germany recently signaled that it will veto Brexit extension unless backed by the second referendum.
The opposition Labour party leader Jeremy Corbyn was on that line as he proposed to ask the EU for the second referendum if given the chance to become the PM.
While the present Prime Minister Theresa May has already announced her departure on June 07, her Brexit proposal will be discussed in the UK’s Parliament during next week and dominate British headlines.
On the economic calendar, British consumer credit data for April might be of immediate interest to investors ahead of the US personal income and consumption data that will be followed by Chicago purchasing manager index (PMI) and Michigan consumer sentiment index for May.
The UK consumer credit may increase to 0.978 billion British Pounds (GBP) from 0.549 billion GBP while the US personal income may rise to 0.3% from 0.1% and personal spendings could soften to 0.2% from 0.9% prior. Further, Chicago PMI may advance to 53.7 from 52.6 but consumer confidence gauge from the US is expected to soften to 101.50 from 102.40.
Technical Analysis
1.2680 and 1.2700 seem limiting immediate upside ahead of highlighting three-week-old resistance-line at 1.2720 and February month bottom near 1.2770.
On the flipside, 1.2600 and 1.2580 can entertain sellers ahead of pleasing them with 1.2480 and 2019 bottom of 1.2430.
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