- Fresh optimism surrounding the Brexit deal propels GBP/USD to a two-month high.
- Brexit talks between the EU's chief negotiator Michel Barnier and UK Brexit Secretary Stephen Barclay will be the key.
- BOE’s quarterly Bulletin, Fed speak, trade headlines can offer intermediate moves.
With the EU lawmakers finally speaking the UK PM Johnson’s lines, the GBP/USD pair takes the bids to 1.2550 while heading into the London open on Friday.
Not only the European Commission President Jean-Claude Juncker’s openness towards alternative solutions to the Irish backstop recently triggered the optimism that the United Kingdom (UK) lawmakers will be able to sign a Brexit deal with the European Union (EU) by the Prime Minister Boris Johnson’s October 31 deadline.
Adding to the sentiment could be comments from the Irish Taoiseach Leo Varadkar that showed readiness to discuss the deal his British counterpart during next week’s United Nation’s (UN) gathering.
On the other hand, the US Dollar (USD) seems to witness downside pressure amid the latest shift in trade sentiments with China. The same could be witnessed in downbeat performance of the US 10-year treasury yields.
Investors will be closely observing details of today’s meeting between the EU and UK’s key Brexit negotiators after the BBC news claimed that the British office has already shared documents showing Irish backstop alternatives with the EU. It should, however, be noted that a final deal is still very far as Irish PM and the UK’s members of the Parliament (MPs) also have a right to interfere and won’t miss that.
Also, the Bank of England (BOE) recently downgraded its growth and inflation forecasts and might follow the suit via its quarterly bulletin. On the other hand, the Federal Reserve policymakers, namely Federal Reserve Bank of New York President John Williams and the Federal Reserve Bank of Boston President Eric Rosengren, are also up for public appearances and could share details of the Fed’s recent hawkish rate cut.
GBP/USD buyers need to conquer three-week-old upward sloping trend-line, close to 1.2580 now, in order to aim for 1.2650 and then to 61.8% Fibonacci retracement level of May-September downpour, at 1.2712. In a case, nearly overbought conditions of 14-day relative strength index (RSI) triggers the pair’s pullback below 100-DMA level of 1.2490, 1.2385/80 area including July 17 low and early-September high will be the key to watch.
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.