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.

Anil Panchal FXStreet

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.

Additional important levels

Overview
Today last price	1.4001
Today Daily Change	19 pips
Today Daily Change %	0.14%
Today daily open	1.3982

Trends
Daily SMA20	1.3877
Daily SMA50	1.3858
Daily SMA100	1.3784
Daily SMA200	1.345

Levels
Previous Daily High	1.4006
Previous Daily Low	1.3889
Previous Weekly High	1.4006
Previous Weekly Low	1.3801
Previous Monthly High	1.4009
Previous Monthly Low	1.3669
Daily Fibonacci 38.2%	1.3961
Daily Fibonacci 61.8%	1.3934
Daily Pivot Point S1	1.3912
Daily Pivot Point S2	1.3843
Daily Pivot Point S3	1.3796
Daily Pivot Point R1	1.4029
Daily Pivot Point R2	1.4075
Daily Pivot Point R3	1.4145

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.

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