- UK PM Johnson preferred Brexit hardliners while filing key Cabinet positions.
- Trade developments concerning the US and China, bets over the Fed’s next move and UK’s political play to remain in the spotlight.
- The US Durable Goods Orders and the UK CBI Distributive Trades Survey decorate the economic calendar.
With the pro-Brexiteers holding key UK positions under the new PM, GBP/USD refrains from extending previous gains while declining to 1.2475 ahead of the London open on Thursday.
Boris Johnson overhauled the British Cabinet on the first day of his role as a Prime Minister (PM) and the key characteristic marked in leading position holders is their support for a hard Brexit.
In the new Cabinet, Jacob Rees Mogg will be the leader of the House of Commons whereas Sajid Javid will occupy the position of Chancellor. Further, Dominic Raab and Priti Patel will mark a comeback as the Foreign Secretary and the Home Secretary respectively.
PM Johnson also reiterated his pledge to leave the EU by October 31 with "no ifs, no buts", which in-turn highlights the risk of a no-deal Brexit should the regional leaders avoid changing previous conditions. On the other hand, the EU officials exerted pressure on the UK PM in their curt letter of congratulations to define the Brexit plan in detail.
At the US, markets keep expecting the Federal Reserve to announce 50 basis points (bps) cut during next week’s meeting while giving less importance to positive developments surrounding the US-China trade.
Investors may now seek further clues as to how the new British PM moves forward in his duties while also concentrating on the US Durable Goods Orders and the UK CBI Distributive Trades Survey details. While the US data is expected to recover to 0.7% from -1.3% in June, the UK statistics could soften previous plunge of -42% to -10%.
Technical Analysis
Unless breaking 1.2440/30 support-zone including July 09 low and support-line of the short-term symmetrical triangle, the pair isn’t expected to revisit 1.2382, which in turn highlights the importance of 1.2505 and 1.2540 as immediate resistance.
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.