GBP/USD: On the bids to 1.2160 after latest US/UK headlines

  • GBP/USD rises after the UK government turns down pessimistic predictions in the Yellowhammer report.
  • The latest statements from the US President Donald Trump add to the strength.

With the UK government sources on their run to turn down the Yellowhammer report’s predictions, coupled with the US President’s comments, GBP/USD takes the bids to 1.2160 during the early Asian session on Monday.

In reaction to the leaked Yellowhammer report predicting worst outcomes of the no-deal Brexit, as per The Guardian, the UK government officials say that it is by one of Theresa May’s former ministers in order to undermine the Prime Minister (PM) Boris Johnson’s trip to the EU.

The Sunday Times spread a leaked Yellowhammer report predicting transport disruption and shortages of food, water and medicines. However, British lawmakers ranging from the Cabinet Minister Michael Gove to the Energy Minister Kwasi Kwarteng turned the table around by terming it as a scaremongering.

Adding to the pair’s strength was the US President Donald Trump’s comments criticizing the Federal Reserve and renewed fears of no trade deal with China by terming Huawei as a national threat and challenging the dragon nation’s intervention in Hong Kong.

While Thursday’s Jackson Hole Symposium will be the key to global market watchers, the UK PM’s EU visit during Wednesday and Thursday, coupled with Wednesday’s the Federal Open Market Committee (FOMC) Minutes, can offer intermediate trading opportunities.

Technical Analysis

The 1.2210/15 area comprising July 29 low and August 06 high seems to cap near-term upside ahead of highlighting 1.2250 and mid-July low surrounding 1.2380. On the downside, multiple supports around 1.2100 can question sellers ahead of pushing them towards 1.2015 and 1.2000 rest-points.

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