- GBP/USD bounces off 1.2415 to probe the intraday range’s resistance.
- US dollar pullback offers immediate recovery amid a quiet session.
- Trade war, coronavirus and Brexit continue to portray the trading theme.
GBP/USD pulls back from 1.2415 to 1.2428, up 0.05% on a day, while heading into the London open on Friday. Even so, the Cable keeps the intraday range between 1.2415 and 1.2430 by the press time. Although the US dollar’s mild weakness seems to benefit the quote off-late, a lack of market liquidity seems to curb the moves amid a light calendar.
The US dollar index (DXY), a gauge of the greenback versus the major currencies, eases from a four-day top to 97.36, down 0.03%, as we write. An increase in the US coronavirus (COVID-19) cases seems to exert downside pressure on the USD. As per the State Health Department, new cases surged to the fresh record high of 39,327 on Thursday versus 38,115 the last. Amid the rising numbers, Texas Governor ordered a pause to all reopening plans.
Not only in the US, but Britain also flashed red signals after PM Boris Johnson eased lockdown restrictions. The latest data suggest 149 virus-related deaths. The same put the Tory leader’s push for normal conditions in danger despite a wide appreciation of the UK’s tracking system and efforts to find the vaccine.
Other than the virus woes, Brexit is also probing the pair’s momentum. UK’s Chief Negotiator David Frost again criticized the European push during Thursday while describing the expectations for the key departure talks starting from Monday. "For the first time since March, Brexit negotiators will meet face to face in Brussels and then London. These meetings will be smaller and focused on seeing whether we can begin to make genuine and rapid progress towards an agreement. This needs to be a real negotiation and some of the EU's unrealistic positions will have to change if we are to move forward,” said the diplomat.
Additionally, the US threats to levy tariffs on the EU/UK goods and fears of no Britain-Tokyo deal in the stipulated six weeks add pressure on the market sentiment. It’s worth mentioning that the hopes of a Value Added Tax (VAT) adding strength to the Cable also waned recently after the Institute for Fiscal Studies (IFS), a leading UK think-tank, warned against a temporary cut.
Against this backdrop, the US 10-year Treasury yields consolidate earlier losses near 0.68% whereas stocks in Asia also print mild gain as we write.
Given the lack of major data/events from the UK, the pair traders may keep eyes on the risk catalysts for fresh impetus. Among them, Brexit headlines might gain major attention ahead of Monday’s talks. On the other hand, the US Michigan Consumer Sentiment Index and Personal Consumption Expenditure and Personal Income details might entertain traders during the US session.
Considering Thursday’s Doji near the four-day low, bulls may await a clear break above a descending trend line from June 10, at 1.2440 now, to aim for 50-day EMA near 1.2460. Meanwhile, the pair’s declines below Thursday’s low of 1.2389 could again attack the monthly bottom surrounding 1.2325 and May 19 top near 1.2300.
Additional important levels
|Today last price||1.2426|
|Today Daily Change||7 pips|
|Today Daily Change %||0.06%|
|Today daily open||1.2419|
|Previous Daily High||1.2464|
|Previous Daily Low||1.2389|
|Previous Weekly High||1.2688|
|Previous Weekly Low||1.2344|
|Previous Monthly High||1.2601|
|Previous Monthly Low||1.2076|
|Daily Fibonacci 38.2%||1.2436|
|Daily Fibonacci 61.8%||1.2418|
|Daily Pivot Point S1||1.2384|
|Daily Pivot Point S2||1.2349|
|Daily Pivot Point S3||1.2308|
|Daily Pivot Point R1||1.2459|
|Daily Pivot Point R2||1.25|
|Daily Pivot Point R3||1.2535|
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.