GBP/USD flirts with three-week high near 1.4000 as Scottish elections, Brexit test buyers
- GBP/USD needs strong push to keep Friday’s biggest jump since April 19, trying to stay positive of late.
- Nicola Sturgeon wins Scottish election but SNP needs majority for second referendum.
- Exporters from UK freeports face tariffs to 23 countries following fresh post-Brexit trade agreements.
- Friday’s US NFP drowned the US dollar, cable traders need risk-on mood to extend the run-up.
GBP/USD seesaws around the multi-day high near 1.4000, flashed on Friday, amid the early Friday morning in Asia. In doing so, the cable pays a little heed to the weekend news suggesting more challenges to UK PM Boris Johnson, due to Scottish election results as well as the recently agreed post-Brexit trade deals.
Nicola Sturgeon needs one seat to beat Johnson…
Scottish National Party (SNP) marked a historic fourth win Holyrood on Saturday and helped Scotland’s First Minister to tell UK Prime Minister (PM) Boris Johnson that the second independence referendum is “a matter of when not if”. However, “the SNP won 64 seats, missing out on an overall majority by just one seat, after winning a record number of constituencies despite a surge in anti-independence tactical voting,” said the Guardian.
Following the election results, UK PM Johnson issued a letter, per The Guardian, to join a UK-wide Covid recovery summit involving all four governments, taking a softer approach than on Friday when called a fresh referendum “irresponsible and reckless”.
Elsewhere, the Financial Times (FT) marked hardships for eight new English freeports as the latest post-Brexit trade deals include clauses that specifically prohibit manufacturers in freeport-type zones from benefiting from the deals.
It should, however, be noted that the British traders might be waiting for Boris Johnson’s any surprise moves, which is famous for, not to forget the UK’s Halifax House Price Index and BRC Like-for-Like Retail Sales for fresh impulse.
Alternatively, the US dollar’s performance and the Asian traders’ reaction to Friday’s disappointing Nonfarm Payrolls, 266K versus nearly a million expected, will also be the key, not to forget the coronavirus (COVID-19) crisis.
Technical analysis
Bulls need a clear break of 1.4010-20 area including multiple tops marked since early March to stay hopeful. Alternatively, a pullback below late April’s high of 1.3976 could tease intraday sellers.
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.
