GBP/USD: Less attention to UK politics as all eyes on trade headlines

Despite witnessing British political drama during the early Asian morning, the GBP/USD pair trades modestly flat near 1.2680 while heading into the London open on Thursday.

Final candidates for the UK Prime Minister’s post, namely Boris Johnson and Jeremy Hunt, recently took part in the digital hustings to lure Conservatives. That said, the frontrunner Boris Johnson’s U-turn from previous Brexit bias got major market attention.

Also, The Guardian says that some of the Tories are likely to join the cross-party plan to put forward various proposals concerning the Brexit soon. Among them, rejection of no deal Brexit and blocking major government spending on hard Brexit grab the spotlights.

However, traders showed little reaction to the British political news as markets await headlines from Japan where the world’s 20 most powerful national leaders will meet.

While trade headlines from the G20 are likely to dominate near-term market sentiment, the US first quarter Q1 2019 gross domestic product (GDP), Pending Home Sales and Personal Consumption Expenditure Prices could offer intermediate trade opportunities. The US GDP is likely to remain unchanged at 3.1% if following annualized figures on a quarterly basis; though, GDP price index might increase to 0.8% from 0.5%. Further, Personal Consumption Expenditure Prices are also expected to remain unchanged at 1.0% on a quarterly format whereas Pending Home Sales could reverse previous -1.5% contraction with +1.0% gain during May month.

Technical Analysis

A Doji candle on the daily chart might trigger the pair’s pullback from previous selling towards the week’s high around 1.2785 that holds the key to its run-up to 1.2860/65 region comprising 100-day exponential moving average (100-D EMA) and April month low.

Alternatively, 1.2660 and 1.2600 can entertain sellers before highlighting the month’s low near 1.2506.