GBP/USD under pressure amid UK’s political plays, trade in focus
- GBP/USD fails to cheer positive political headlines from the UK amid doubts over the US-China trade deal.
- Fedspeak, second-tier US employment data will decorate the economic calendar.
- Trade/Brexit news will keep the driver’s seat.
Despite increasing odds for the Tory leader to win the December month snap election, GBP/USD witnesses downside pressure as pessimism surrounding the US-China trade deal keeps the greenback strength intact. The cable takes the rounds to 1.2880 by the press time of pre-London opening on Wednesday.
Recent headlines suggest that the United States (US) and China are still far from reaching even a “Phase One” deal. Adding to the trade pessimism is the dragon nation’s intact support for Hong Kong’s hard stand against protestors.
On the other hand, the United Kingdom’s (UK) political environment is quite supportive to the Prime Minister (PM) Boris Johnson as Brexit party leader is finally negotiating a deal with Tories to pull back some from his 600 candidates to support the ruling party win in the December month election. However, his condition to not support the Tory leader’s Brexit deal in the parliaments seems to tame the optimism.
Further, diplomats from the European Union (EU) like Chief Brexit negotiator Michael Barnier and the European Commission President Jean-Claude Junker keep flashing worrisome signs relating to the British departure.
While trade/Brexit headlines are likely to keep dominating near-term market moves, recent speculations that the US Federal Reserve (Fed) will stop cutting rates any further highlight the importance of speeches from the Federal Reserve Bank of Chicago President Charles Evans and Federal Reserve Bank of New York President John Williams.
On the data front, the preliminary readings of the US Nonfarm Productivity and Unit Labour Cost for the third quarter (Q3) will be closely observed after the JOLTS Job Openings challenged the US employment optimism on Tuesday.
Technical Analysis
Unless breaking a three-week-old symmetrical triangle, between 1.2845 and 1.2960, prices are less likely to aim for either a 200-day Simple Moving Average (SMA) level of 1.2708 or 1.3000 round-figure depending upon the side of the breakout.
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.
