GBP/USD snaps three-day winning streak despite UK PM Johnson’s Brexit victory

GBP/USD drops to the intra-day low of 1.3124 while heading into the London open on Thursday. In doing so, the pair snaps the three-day winning streak while also ignoring the UK PM Boris Johnson’s ability to end the years of Brexit deadlock by winning support for his Brexit Withdrawal Agreement Bill (WAB).

Despite witnessing five amendments from the House of Lords, the Tory leader managed to pass his WAB through the Parliaments (without any change) while holding the majority support. The bill will now get the royal assent within nine days to become the law.

Even so, the risk of a hard Brexit is still looming as the Independent quotes EU chief Von der Leyen while saying that the UK’s access to the single market will be weakened if it does not continue to sign up to EU rules after Brexit. The EU chief also insisted that trade talks would begin in February, following speculation that there could be a further delay until March, the news said.

Also exerting downside pressure on the pair could be the US threat to levy sanctions if the UK moves forward in its punitive measures on Google and Facebook. Earlier, France moved back from any such actions after the US threats.

On the other hand, fears of a Chinese virus outbreak and noises surrounding the US-China trade deal, coupled with US President Donald Trump’s impeachment hearings, keep the pressure on the market’s risk tone.

As a result, the US 10-year treasury yields remain under pressure around 1.75% whereas the Asian stocks also portray mixed trade sentiment.

Technical Analysis

Only if the pair closes below 21-day SMA level of 1.3093, it can revisit 1.3000 and the monthly low of 1.2954, else odds of the pair’s rise to 1.3280, comprising the monthly top, can’t be denied.