GBP/USD: Doubts over Conservative manifesto, broad USD strength keep sellers hopeful

  • GBP/USD remains under pressure amid doubts over Tory manifesto.
  • Broad USD strength, backed by recently upbeat data, adds to the pair’s weakness.
  • Second-tier data from the US and the UK could entertain traders with trade/Brexit be the key drivers.

GBP/USD stays on the back foot around 1.2850 during Monday’s Asian session. The pair initial benefited from the polls showing a hike in Tory support for the December election before losing grounds on doubts emanating from the ruling party’s latest manifesto.

During the weekend, the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson released the ruling Conservative Party’s manifesto that offers many austerity measures in addition to a smooth Brexit. The party’s promises over an increase in National Healthcare System (NHS) budget by £33.9 billion by 2023-24, an offer of 50,000 nurses and not to raise rates of income tax, national insurance or VAT over the next five years grabbed major attention. The same got criticized as well. Not only the opposition Labour Party Leader Jeremy Corbyn but the analysis provided by the independent charity organization Full Fact, published by The Guardian, also raises doubts over the government’s claims that their policy will cost the NHS £879m in 2023/24. Additionally, concerns about the increase in insurance contribution by the workers were also making rounds.

Even so, the latest series of polls keep the Conservatives at the front seat with more than 10 percentage points of a lead over other parties.

The Cable registered a heavy drop on Friday as preliminary reading of activity numbers keep portraying the market’s Brexit fears. The same contradicts with the United States (US) statistics that kept the greenback on the other side.

Also adding to the US dollar’s (USD) gains was optimism surrounding the US-China trade deal after the US President Donald Trump said that a trade deal with China is “potentially very close”. Though, optimism remains under check with the Trump administration’s readiness to take a “good look” at the Hong Kong bill, which in turn could renew the tussle between the US and China while also negatively affecting the trade negotiations. The latest news from Hong Kong shows pro-democracy parties leading in the local elections.

Moving on, the UK CBI Distributive Trade Survey and the US Chicago Fed National Activity Index, coupled with the US Dallas Fed Manufacturing Index, will decorate the economic calendar. Though, major market attention will be on the trade/political headlines for fresh impulse.

Technical Analysis

The pair’s declines below 21-day Simple Moving Average (SMA) highlights the monthly low near 1.2770 for sellers while an upside clearance of 1.2880 could target 1.2970 and 1.3000 during further recovery.

additional important levels

Today last price 1.285
Today Daily Change 13 pips
Today Daily Change % 0.10%
Today daily open 1.2837
Daily SMA20 1.2881
Daily SMA50 1.2675
Daily SMA100 1.2478
Daily SMA200 1.2704
Previous Daily High 1.2929
Previous Daily Low 1.2821
Previous Weekly High 1.2986
Previous Weekly Low 1.2821
Previous Monthly High 1.3013
Previous Monthly Low 1.2194
Daily Fibonacci 38.2% 1.2862
Daily Fibonacci 61.8% 1.2888
Daily Pivot Point S1 1.2795
Daily Pivot Point S2 1.2754
Daily Pivot Point S3 1.2687
Daily Pivot Point R1 1.2903
Daily Pivot Point R2 1.297
Daily Pivot Point R3 1.3012



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.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD remains pressured after US data misses estimates

EUR/USD is trading closer to 1.1750, paring its recovery from earlier in the day as the safe-haven dollar is bid. US Consumer Sentiment missed estimates with 72 points in September. The financial woes of China's Evergrande are weighing on sentiment.


GBP/USD trades under 1.38 amid on UK data, dollar strength

GBP/USD is on the back foot, trading under 1.38 after UK Retail Sales figures disappointed with -0.9% in August, worse than expected. Brexit uncertainty and dollar demand weighed on the pair earlier. 


XAU/USD surrenders intraday gains, drops closer to $1,750 level

Gold struggled to preserve its intraday gains and dropped to the lower end of the daily trading range during the early North American session. 

Gold News

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

The latest development in the ongoing SEC vs. Ripple lawsuit is that documents are classified as privileged and blocked for public viewing. Though institutional investors are yet to take big bets on the altcoin in 2021, retail investors are actively trading in XRP.

Read more

US Michigan Consumer Sentiment Preview: Markets will have to look hard for positive signs

Consumer outlook expected to rebound to 72.2 in September. August’s 70.2 was the lowest since December 2011. Inflation and Delta variant wearing on US optimism. Markets face negative dollar risk from fading consumer optimism.

Read more