GBP/USD sellers attack 1.4100 amid Brexit doldrums ahead of Biden-Johnson talks
- GBP/USD prints a three-day downtrend amid anxious markets.
- UK’s Frost conveyed no progress over Northern Ireland talks with EU’s Sefcovic.
- US President Biden criticizes UK PM Johnson over the key Brexit issue ahead of the meeting.
- BOE’s Haldane, Brexit headlines and US CPI become crucial catalysts to watch.
GBP/USD remains on the back foot around 1.4110, down 0.07% intraday, during a subdued Asian session on Thursday. Although cautious sentiment ahead of the key Brexit event and the US Consumer Price Index (CPI) tests momentum traders, the recent negative headlines for the cable buyers seem to weigh on the quote.
Among them, The Times’ update over the last-ditched efforts to resolve the Northern Ireland (NI) issue by UK Brexit Minister David Frost and European Commission vice-president Maros Sefcovic gained major attention. “The Brexit minister Lord Frost today said there had been “no breakthroughs” with the EU after “frank and honest” discussions about the Northern Ireland impasse, including policies on sausages and chilled meats,” said The Times.
On the same line was the headline, conveyed by The Times as well, saying US President Joe Biden accuses UK PM Boris Johnson of ‘Inflaming’ Irish tensions.
It’s worth noting that the upbeat comments from BOE’s Chief Economist Andy Haldane couldn’t win over the bears discussing a third covid wave in the UK, backed by comments from UK epidemiologist Neil Ferguson the previous day. BOE’s Haldane reiterated his push for tapering but markets want to hear something new.
Elsewhere, the Financial Times (FT) came out with the news suggesting the UK-US leaders’ likely push against China during the upcoming Group of Seven (G7) meeting in London, starting from Friday. This joins the US passage of a bill to compete with Chinese technology companies and anticipated push for another detailed inquiry over the coronavirus (COVID-19) origins.
Amid these plays, the US 10-year Treasury yields dropped to the lowest since March but the cautious mood restricted the Wall Street moves, also limiting the S&P 500 Futures by the press time.
Moving on, another speech from BOE’s Haldane and Brexit headlines could keep entertaining the GBP/USD traders ahead of the key US CPI release. Should the price pressure in America flashes stronger signs than expected, coupled with the Brexit-negative headlines, GBP/USD is up for breaking the monthly range to the south.
Technical analysis
GBP/USD nears the lower-end of the near-term important trading area between 1.4080 and 1.4220. However, a downside break of 21-day SMA and bearish MACD keep sellers hopeful.
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.
