GBP/USD: Firmer, still below 1.2800, UK data, G7 call in focus

With the key catalysts on the cards for the GBP/USD traders, the Cable snaps the previous four-day losing streak while rising to 1.2782, up 0.15%, ahead of the London open on Tuesday. Even if the EU-UK talks fail to provide any positive news, neither does the British politics, the broad US dollar weakness should have helped the quote witness a bounce from the multi-week low.

The EU-UK leaders spent one of four days of Brexit negotiations just by heating the political temperature. While the British side maintained their high standards of not following the EU laws and weighing proposals with benefits concerning fisheries, the EU officials warned not to adhere to political rhetoric and act in good faith as the matter involves 28 nations. The second day of negotiations will actually be important as details concerning goods to laws and the level playing field will be discussed among the 10-teams.

At home, the UK opposition Labour Party finally managed to exert pressure and invite legal investigation into the Home Secretary Priti Patel’s alleged misbehavior with the staff. However, with the UK PM Boris Johnson’s support, nothing major is likely to happen over there.

It should also be noted that the UK express cited Britain offering post-Brexit free trade to have a fast deal, which in turn could ignite grave concerns with the EU.

Elsewhere, the widespread contagion of coronavirus (COVID-19) into the top-tier economies pushes the G7 leaders towards a conference call, at 12:00 GMT. While the text is almost complete with no drastic measures expected, any surprises can’t be ruled out. It’s worth mentioning that the US Federal Reserve is under immense pressure from the political fraternity to announce a rate cut and the clues of the same will be followed closely.

Additionally, the UK Treasury Committee is to question BOE's Carney and Bailey and the details of the same will also be observed for fresh impulse.

Technical Analysis

GBP/USD needs to recover beyond early-February lows surrounding 1.2870 to aim for 1.3000, failure to do so can keep it directed towards September 2019 high near 1.2580.