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

Overview
Today last price 1.285
Today Daily Change 13 pips
Today Daily Change % 0.10%
Today daily open 1.2837
 
Trends
Daily SMA20 1.2881
Daily SMA50 1.2675
Daily SMA100 1.2478
Daily SMA200 1.2704
 
Levels
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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD: Consolidates heaviest gains in two weeks above 0.7100 amid cautious optimism

AUD/USD eases from weekly high of 0.7137 marked on Wednesday. Virus woes, dovish tone of Fed’s Bullard also probe the optimists. RBA’s Debelle, NAB Business Confidence will offer immediate direction, risk news remain as the main driver.

AUD/USD News

USD/JPY bounces off monthly low towards 105.00 as market optimism fades

USD/JPY retraces the biggest losses in two months from 104.34. S&P 500 Futures, Nikkei 225 drop around 0.50%, stocks in Pacific are also down. Japan’s All Industry Activity Index, risk catalysts will be the key to watch.

USD/JPY News

Gold bulls await fresh clues to probe monthly top below $1,950

Gold buyers catch a breather above $1,920 after posting the biggest gains in a fortnight. COVID-19 data from US states, Victoria propel fears of wider wave 2.0. US Initial Jobless Claims, aid package updates will be the key.

Gold News

WTI: Buyers lurk around 100-day EMA

WTI bounces off $39.83, the lowest in one week, to battle 50% Fibonacci retracement. EIA inventories recovered from -3.818M prior, -1.021M forecast. The energy benchmark dropped the lowest since October 15 the previous day.

Oil News

2020 Elections: Trump is is showing signs of a comeback, will the dollar follow?

"It ain't over till the fat lady sings" – goes the adage which is relevant for the 2020 Presidential Elections as well. Two weeks ahead of election day, there are signs that incumbent Donald Trump is clawing back some support, raising the chances that the race could drag on for longer.

Read more

Forex MAJORS

Cryptocurrencies

Signatures