- GBP/USD remains modestly changed after reversing from 21-DMA.
- Upbeat Brexit signals from Germany, the latest negative headlines from France highlights Johnson-Macron meet.
- The British opposition Labour party leader Corbyn keeps preparing to topple UK PM Johnson.
With the traders keenly waiting details of the UK PM Johnson and the French President Macros meeting, GBP/USD trades little changed to 1.2130 while heading into the London open on Thursday.
The UK Prime Minister (PM) Boris Johnson somehow got the positive news from Germany as Chancellor Angela Merkel showed readiness to renegotiate Irish backstop if Britain comes up with a sound alternative within 30 days.
As a result, investors await details of the UK PM Johnson and French President Emmanuel Macron meet. Recent headlines from France, as conveyed by Reuters and The Sun, haven’t been positive as it turns down any renegotiation requests while keeping the UK liable to pay divorce bill of £39billion despite no-deal Brexit.
At home, the opposition Labour party leader Jeremy Corbyn keeps preparing to topple the Tory leader in a no-confidence vote, around early September. The Guardian notes that Mr. Corbyn will gather opposition leaders and Tory rebels at a meeting in parliament next week to discuss the fight against a no-deal Brexit.
On the other hand, the US President Donald Trump takes a U-turn, as usual, to inflate the odds of a trade deal with China while geopolitical tension concerning the Middle East and North Korea keep the risk-tone confined. Adding to the market challenges are the pessimistic comments from German Finance Ministry.
In addition to the UK-France leaders’ meet, the UK CBI Distributive Retail Sales and the US Markit PMI numbers will also entertain short-term traders ahead of the crucial Jackson Hole Symposium that will begin from today.
Technical Analysis
The bullish signal by the 12-bar moving average convergence and divergence (MACD) support the pair’s another run-up to 21-day simple moving average (DMA) level near 1.2160 now. However, 23.6% Fibonacci retracement level of June-August downpour, at 1.2195, and a descending trend-line since late-June near 1.2280 will question buyers then after. Alternatively, 10-DMA level of 1.2100 becomes immediate support ahead of 1.2050 and 1.2015 that holds the key to the pair’s drop to 2017 low near 1.1987.
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
AUD/USD jumps above 0.6500 after hot Australian CPI data
AUD/USD extended gains and recaptured 0.6500 in Asian trading, following the release of hotter-than-expected Australian inflation data. The Australian CPI rose 1% in QoQ in Q1 against 0.8% forecast, providing extra legs to the Australian Dollar upside.
USD/JPY hangs near 34-year high at 154.88 as intervention risks loom
USD/JPY is sitting at a multi-decade high of 154.88 reached on Tuesday. Traders refrain from placing fresh bets on the pair as Japan's FX intervention risks loom. Broad US Dollar weakness also caps the upside in the major. US Durable Goods data are next on tap.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Crypto community reacts as BRICS considers launching stablecoin for international trade settlement
BRICS is intensifying efforts to reduce its reliance on the US dollar after plans for its stablecoin effort surfaced online on Tuesday. Most people expect the stablecoin to be backed by gold, considering BRICS nations have been accumulating large holdings of the commodity.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Fed might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.