GBP/USD: Modestly flat above 1.3000, Huawei talks in the spotlight


  • GBP/USD sellers catch a breath after four consecutive days of declines.
  • The UK’s favor for the Chinese tech giant negatively affects its friendship with the US.
  • Brexit headlines keep calm while BOE readies for the decision.

GBP/USD trades near 1.3020 ahead of the London open on Wednesday. The cable recently weighed down by concerns of the US-UK tussle over the British allowance to the Chinese tech giant for 5G development. However, the moves are less strong ahead of the key BOE meeting on Thursday, followed by Friday’s Brexit day.

Republicans in the US have started criticizing the Tory government’s plan to allow China’s Huawei to build non-core elements of the UK’s 5G network. This is likely to weigh on the US-UK deals and could well be discussed by the US Secretary of State Mike Pompeo when he visits Britain on Wednesday.

On the Brexit side, the UK PM Johnson’s immigration efforts are gaining mixed responses with the ‘Australian-style’ immigration vision getting slapped by the independent Migration Advisory Committee (MAC).

The latest pause could also be attributed to the risk reset based on the receding pessimism concerning China’s coronavirus. The same could be witnessed in the recovery of the US 10-year treasury yields and Asian stocks.

Moving on, odds of the Bank of England’s (BOE) next move are standing on thin ice amid recently mixed data and Brexit concerns, not to forget Governor Carney’s dovish tone. Furthermore, Friday’s Brexit alarm won’t be too good to hear as the European Union and the UK will jostle over trade deals afterward and the early indicators are favoring a negative start.

Technical Analysis

A daily closing below a month-long rising support line, currently at 1.2980, can drag the quote towards a 100-day SMA level of 1.2862, until then, odds of the pair’s pullback to 1.3155/60 can’t be ruled out.

Additional important levels

Overview
Today last price 1.3021
Today Daily Change 1 pips
Today Daily Change % 0.01%
Today daily open 1.302
 
Trends
Daily SMA20 1.3078
Daily SMA50 1.306
Daily SMA100 1.2853
Daily SMA200 1.2693
 
Levels
Previous Daily High 1.3066
Previous Daily Low 1.2974
Previous Weekly High 1.3175
Previous Weekly Low 1.2962
Previous Monthly High 1.3515
Previous Monthly Low 1.2896
Daily Fibonacci 38.2% 1.3009
Daily Fibonacci 61.8% 1.3031
Daily Pivot Point S1 1.2974
Daily Pivot Point S2 1.2928
Daily Pivot Point S3 1.2882
Daily Pivot Point R1 1.3066
Daily Pivot Point R2 1.3112
Daily Pivot Point R3 1.3158

 

 

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