GBP/USD struggles to rise towards 1.3400 amid Brexit jitters, eyes on Chancellor Sunak

GBP/USD remains choppy inside the 13-pips trading range, currently around 1.3357, while heading into Wednesday’s London open. The pair traders mark indecisiveness amid a lack of major data/events as well as mixed clues for Brexit. Also challenging the pair’s move could be the cautious mood ahead of the UK’s Autumn Forecast Statement and US GDP, not to forget FOMC minutes.

Brexit hopes dim even as Labour Party backs anything…

Although the Labour Party Leader Sir Keir Starmer is expected to back a Brexit deal to try to win back the North, his allies claim, per The Sun, mixed signals from Tories and US President-elect Joe Biden’s interference spoil the mood. UK’s senior minister Michael Gove said that the European Union (EU) must move too if there is to be a Brexit deal. On the other hand, Biden insists no Irish boundaries during his first comments after getting rights to have access to information prepared for US President.

Elsewhere, Britain’s Society of Motor Manufacturers and Traders (SMMT) pushed negotiators for a deal by the end of 2020 as “failure to do so could cost the sector 55.4 billion pounds ($74 billion) in tariffs by 2025,” said Reuters. Also flashing red signals for no-deal Brexit were from the BOE Governor Andrew Bailey who tried to tame British Finance Minister Sunak’s comments suggesting, “The UK will remain a global leader for asset management after Brexit.”

Against this backdrop, the British government is on track to borrow roughly 400 billion pounds ($534 billion) this financial year, making it the highest level since 1944, compared to the GDP, as per Reuters. Even so, Chancellor Sunak is expected to announce extra spending “to ease a backlog in the health system, counter a surge in unemployment and build new infrastructure in a one-year Spending Review that he is due to deliver to parliament at around 1230 GMT,” said Reuters.

Other than Sunak’s speech, the preliminary reading of US Q3 GDP, expected 33.1%, as well as minutes of the latest FOMC meeting, will also be important to watch. Additionally, recent positives concerning the coronavirus (COVID-19) and its vaccine should also be checked for further upside.

Technical analysis

Although monthly support line, near 1.3330 now, portrays GBP/USD strength, nearly overbought RSI conditions join receding strength of the bullish MACD to suggest fear of a pullback unless the quote successfully crosses September 02 high of 1.3402.