GBP/USD seesaws around 1.2400, fails to offer much action on UK PM Johnson’s speech

GBP/USD drops to 1.2410, after ticking up to the intraday high of 1.2423, at the start of the week’s trading session in Asia. The Cable fails to benefit from the UK PM Johnson’s easing of lockdown restrictions starting from Monday as well as calls of further aids from the Tory government.

UK PM Johnson eased lockdown restrictions…

Having earlier shifted to “Stay Alert” from “Stay at Home” suggestion, UK PM Boris Johnson recently announced the easing of lockdown restrictions for the British nationals.

The first help will be for those who cannot work from home and so can join from Monday while the rest may start adding to the works starting from Wednesday, as per the Tory leaders’ lockdown speech. Even so, the national leader wasn’t quite sure of starting the schools before June 01.

Another attempt to placate labors…

To fire another cylinder in an attempt to ward off the criticism concerning a lack of performance, UK Chancellor Rishi Sunak is likely to announce the extension of wage aid on Monday, as per The Telegraph. The news suggests that the Ministers are expected to extend the state bankrolling of wages until the end of September, albeit at a reduced rate of 60pc, while also topping up the pay packets of staff brought back to work on a part-time basis.

Moving on, traders may now gear up for the week-long Brexit negotiations between the UK and the European Union (EU) diplomats starting from Monday. Both the parties marked the dismal start of the departure talks at the end of the second round. However, nearness to the June deadline, after which Tories may think of leaving without a deal, might exert pressure on the bloc’s policymakers to agree to the British demands.

Other than the Brexit talks, virus/trade updates will also be the key amid a light economic calendar. Recently, the market witnessed risk-on sentiment amid improving odds of the no tussle between the US and China as well as a promising triple antiviral drug for the coronavirus (COVID-19).

Technical analysis

A daily closing beyond 50-day EMA level, near 1.2470 now, becomes necessary for the bulls to carry the recovery moves from 1.2265/60. In the absence of which, late-April low close to 1.2250/45 and the previous month bottom around 1.2165 will be on the bears’ radars.