GBP/USD holds on to recovery gains ahead of UK Manufacturing PMI, US NFP

GBP/USD takes the bids amid UK political optimism, greenback weakness.
US-China trade story keeps risk sentiment dwindled ahead of the key data.
Fedspeak and the US ISM Manufacturing PMI add to the catalysts.

Anil Panchal FXStreet

GBP/USD keeps its latest recovery mode active as it takes the bids to 1.2960 while heading into the London open on Friday.

The pair has recently been favored by an improvement in odds that favors the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson’s victory in the upcoming snap general election. Recently adding to the Tory side happiness was the news that the Brexit party is pulling out of many polls, which in turn helps PM Johnson.

Polls from Britain Elects show Tories in the lead with 36.1% – up 1% since October 25 – while all other UK-wide parties are losing ground. The opposition Labour Party, led by Jeremy Corbyn, is down 0.4% to 24.9%. That puts the gap at over 12%.

Not only the UK residents but the United States (US) President Donald Trump also openly criticized the opposition Labour Party leader Jeremy Corbyn while saying that he will be “so bad” for Britain.

On the other hand, the US Dollar (USD) keeps its downwards trajectory intact as pessimism surrounding the US-China trade pessimism increases and the same has been well pointed out by the Chinese diplomats at the end of a key meeting.

Markets are likely to wait for the October month Markit Manufacturing Purchasing Managers Index (PMI) from the UK, followed by the US employment data, ISM Manufacturing PMI and comments from the key Federal Reserve (Fed) policymakers.

Expectations favor a downbeat print of the UK manufacturing gauge to confront forecast of recovery in the US manufacturing data and mixed employment statistics with likely weak Nonfarm Payrolls.

Technical Analysis

Prices need a sustained break above 1.3000, also crossing the October month high near 1.3015, to rise towards May month top surrounding 1.3180, failing to which can recall the June top near 1.2780.

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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