GBP/USD: Under pressure despite Brexit-positive headlines

GBP/USD shows little reaction to recently published Brexit-positive news.
Investors await the EU’s response to the UK PM’s deal.
The UK Services PMI, the US ISM Non-Manufacturing PMI, and trade/political headlines will be in the spotlight.

Anil Panchal FXStreet

Despite increasing odds of the UK PM’s Brexit success to grab the October 31 deadline, GBP/USD shows little reaction to the news as the market awaits the EU’s response for further clarity. The Cable stays under pressure around 1.2300 by the press time of Asian morning on Thursday.

The United Kingdom’s (UK) Prime Minister (PM) Boris Johnson finally revealed his Brexit plans to the European Union (EU) that includes Ireland’s close proximity to the bloc with no border check for the goods traveling between the Northern Ireland and the Republic. It also gave Ireland the right to renew relationships after every four years beginning from the year 2025.

The EU responded positively to the Tory leaders’ approach but still said there’s a way for discussion and refrained from further details. Ireland, on the other hand, showed disappointment from the deal while saying it isn’t matching the talks held recently.

On the positive side, the Telegraph ran a story ran rebel Members of the UK’s Parliaments (MPs) from the Labour party will join Democratic Unionist Party (DUP) and some Brexit hardliners to form a group of nearly 25 supporters that stands ready to help the UK PM’s proposal pass through the House of Commons.

Further, the UK’s Minister for no-deal Brexit, Michael Gove, also mentioned the increasing chances of the PM’s plan to get through the Parliament.

Elsewhere, the US Dollar (USD) remains downbeat due to the recent data-led weakness joined by the trade tussle with the EU.

In addition to the EU’s response, September month’s key Purchasing Managers’ Index (PMI) data from the UK and the US, namely the UK’s Services PMI and the US ISM Non-Manufacturing PMI, will also entertain market players during the day.

Technical Analysis

A nine-day-old falling trend-line joins a 21-day exponential moving average (EMA) to limit pair’s immediate upside around 1.2335/40, a break of which could trigger fresh upside to 1.2385/90 resistance-area including September month extremes. Meanwhile, 1.2210/2200 region becomes the tough support on the downside.

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.

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