- GBP/USD bounces off 21-day SMA after first-day of the UK’s Parliament showdown.
- The House leader Jacob Rees-Mogg indicated “an exciting announcement” for Thursday.
- The UK MPs will progress towards no-confidence motion.
With the US Dollar (USD) trimming some of its recent gains, coupled with increasing odds of a soft Brexit, GBP/USD recovers to 1.2375 while heading into the London open on Thursday.
The Cable recently benefited from the heated discussion in the United Kingdom’s (UK) House of Commons that resumed working for the first time after the Prime Minister (PM) Boris Johnson prorogued the Parliament during month-start days. Tories and Labours exchanged rough statements before closing the day with the House Leader Jacob Rees-Mogg announcing adjournment motion for next week for Conservative Party conference. However, the House Leader signaled to offer an exciting announcement on Thursday.
On the other hand, the greenback witnessed some profit-booking after a rally during the previous day. Reasons for the same could range from the US President Donald Trump’s likely impeachment to the mixed statements by the US Federal Reserve policymakers.
Investors will now look forward to how the UK’s Members of the Parliament (MPs) behave during the second day of sitting when the Conservatives have already asked for votes to allow the house adjournment for annual conference.
In a case of the Brexit, the UK PM Johnson indicated optimism to get a trade deal with the EU but Irish counterpart is less positive on it unless the British leader offers any strong solution to the backstop.
It should also be noted that the Bank of England (BOE) Governor Mark Carney is up for speaking at the European Systemic Risk Board annual conference, in Frankfurt. Investors will seek clues of how Brexit can affect the BOE’s future moves during his public appearance.
Other than British political plays and Canrey’s speech, the final reading of the US second quarter (Q2) Gross Domestic Product (GDP) and comments from the Federal Reserve Bank of St. Louis President James Bullard and the Federal Reserve Governor Richard Clarida will also be closely followed for fresh direction.
Technical Analysis
The Cable buyers need to conquer 1.2380/85 area comprising July 17 bottom and early-month high in order to challenge 38.2% Fibonacci retracement of May-September declines, at 1.2425, and 100-day simple moving average (SMA) level of 1.2465. Alternatively, pair’s declines below 21-day SMA around 1.2340 can recall 1.2315 and 1.2245 rest-points.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.