GBP/USD recovers to 1.2520 amid political optimism, soft-Brexit concerns

Tories line-up to avoid no-deal Brexit, the EU weighs concessions during latest talks.
PM hopeful Johnson holds October 31 deadline tightly, Hunt offers to recede tensions with Iran.

Anil Panchal FXStreet

Having witnessed a slump on the previous day, the GBP/USD pair recovers to 1.2520 amid initial Asian morning on Tuesday.

The Cable declined against the US Dollar (USD) after the US NY Empire State Manufacturing Index flashed upbeat numbers. Adding to the pair’s weakness could be no-deal Brexit threats that continue to dominate ever since Boris Johnson entered the race to the UK Prime Minister (PM).

As per the Bloomberg report, the latest talks between the EU and the UK policymakers on Brexit have been constructive and the bloc may work on a package to avoid no-deal Brexit during next month. Further, the BBC quoted Sir Oliver Letwin, a senior Tory member, signaling soft Brexit in a way that if the incoming PM bypasses the parliament to avail no-deal Brexit, Supreme court can block the way.

During the latest hustings, second-last of the UK-wide 16 rounds, Jeremy Hunt showed readiness to ease tension with Iran during this week.

Moving on, monthly UK employment data and comments from the Bank of England (BOE) Governor Mark Carney at the French G7 Presidency 2019 will be the key to watch for fresh impulse ahead of the US data/events dominate the trading sentiment.

Technical Analysis

Buyers will look for a sustained break of 21-day exponential moving average (EMA) level of 1.2585 in order to aim for a late-June low around 1.2665, until then 1.2480 and 1.2430 can keep being on traders’ radar

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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