GBP/USD challenges 3-day downpour ahead of UK PMIs
- GBP/USD is taking the bids for the first time since Monday.
- Tories keep leading the polls despite allegations of spoofing the Labour Party’s manifesto.
- Brexit Party to unveil its policies while the first preliminary PMI from the UK will also be the key to watch.
Given the shift in the market’s trade sentiment, GBP/USD bucks the three-day-old downtrend while taking the bids to 1.2920 ahead of the London open on Friday.
The recent recovery could partially be attributed to the silence, prior to taking a positive turn, in the US-China trade tussle. As per the Reuters, the United States (US) may delay December 15 tariff hikes while the CNBC’s news of China still having US trade negotiators on their invitation list triggered risk recovery. Even so, the US Navy’s claim of “Freedom of Navigation” in the South China Sea was harshly criticized by Beijing.
On the other hand, the United Kingdom’s (UK) ruling Tory Party is under attack over spoofing the opposition Labour Party’s manifesto. The Conservatives were earlier blamed over their factcheck twitter handle. Though, nothing stops the polls to keep the Tories on the lead, as does the latest from Ipsos MORI.
The Brexit Party is up for releasing its policies later today amid the leader Nigel Farage’s calls of making “contract with the British people”. Other than Brexit, an anti-immigration move of Mr. Farage has always been criticized, which in turn might entertain market during the day.
On the economic calendar, Markit is scheduled to release preliminary readings of the UK’s Manufacturing and Services Purchasing Manager Index (PMI) numbers while the US PMIs and Michigan Consumer Sentiment Index will also decorate the line.
“This month brings the first flash PMIs for the UK. For the manufacturing PMI, we look for a bit of a pullback to 49.3 (market: 48.8), as election uncertainty weighs on sentiment. Hopes for a phase I China-US trade deal and receding odds of a hard Brexit should help to keep the PMI above its lows from the summer. We also see upside risks to the services PMI, looking for a small rise from 50.0 to 50.4 (market: 50.1),” says TD Securities.
Technical Analysis
Despite the pair’s recent recovery, bearish pin bar on the daily chart keep favoring the GBP/USD pair’s declines to monthly low near 1.2770. Though, an upside clearance of 1.3000 will defy the bearish candlestick formation.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
