GBP/USD retraces some gains amid lack of fresh catalysts, USD pullback

UK political pessimism, Brexit uncertainty fail to drag GBP/USD down amid dovish Fedspeak.
No immediate data, absence of catalyst during early Asian session limit the pair moves.

Anil Panchal FXStreet

With the US Federal Reserve policymakers keep favoring the easy monetary policy, pessimism surrounding the UK couldn’t derail the GBP/USD pair’s recovery as it trades near 1.2525 amid initial Friday session.

While second-day of the Fed Chair Jerome Powell’s Testimony and comments from notable Fed officials continued playing the tune of rate cuts, the US Dollar (USD) extended its downpour on Thursday before recently witnessing a pullback.

The UK Prime Minister (PM) frontrunner Boris Johnson keep struggling to justify why he did not favor the out-going British ambassador to the US whereas the opposition Labour party also came under fire on allegations indicating anti-Semitism by key members.

The European Commission leader nominee, Ursula von der Leyen, reiterated her refrain from discussing the Brexit deal with the UK’s new PM while also supporting hard Irish border.

Lack of economic data on the calendar might keep pushing investors toward political/trade headlines, where the sentiment hasn’t been positive off-late, for fresh direction.

Technical Analysis

Unless breaking 1.2500 chances of the pair’s run-up towards 21-day exponential moving average (EMA) level of 1.2595 can’t be denied, which in turn dims prospects of the pair’s declines to 1.2440, followed by current month low near 1.2430.

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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