GBP/USD looks for clear direction sub-1.3100 area

GBP/USD seesaws near 1.3050 ahead of the London open on Friday. In doing so, the cable traders catch a breath after a heavy run-up marked during the previous day.

The reason could be attributed to the UK’s Finance Minister Sajid Javid’s surprise resignation. The Chancellor cited the UK PM Boris Johnson’s push to fire the team as a reason for leaving the post. Following his resignation, Rishi Sunak will lead the team and is known to have the Tory leader’s support due to bias towards further spending.

The UK cabinet’s reshuffle also led to the departure of some of the key diplomats that were mostly identified earlier. However, the incoming Attorney General Suella Braverman has the firm view to “take back control” from an interfering judiciary as noted by The Guardian.

The same will harden the Brexit negotiation at the time when the French President recently pushed for the tougher UK commitment to have “the level playing field.”

Further, the UK PM Johnson is reported to have turned down the US visit again, as noted by The Sun, which in turn makes him a less friendly to the US President Donald Trump. The US leader earlier showed dislike for British favor for China’s Huawei.

Elsewhere, the fears concerning coronavirus are getting weaker and supporting the risk recovery. As a result, the US 10-year treasury yields stay modestly down to 1.61% while stocks in Asia are marking a recovery from Thursday’s declines.

Looking forward, the absence of UK data will push the cable traders to keep eyes on political/Brexit headlines, coupled with coronavirus update. However, the US Retail Sales and Michigan Consumer Sentiment Index can please the momentum traders during the later part of the day.

Technical Analysis

Prices are likely to rise towards 1.3100 with 1.3070 acting as an immediate upside barrier. On the downside, 1.2970, 1.2940 and 1.2900 should be watched during the quote’s pullback.