GBP/USD undermines increasing odds for hard-Brexit while aiming 50-day SMA

The Cable ignores fresh clues from the UK PM Candidate highlighting fears of no-deal Brexit.
Mr. Boris stands ready to take the EU help over Irish border issue but defends the October 31 deadline for Brexit.
Jeremy Hunt’s appearance and second-tier data on the spotlight.

Anil Panchal FXStreet

Even with the UK PM candidate Boris Johnson reiterating his pledge to leave the EU on October 31, the GBP/USD pair continues to trade on the front foot near 1.2750 heading into the London open on Tuesday.

There could be many reasons for the said pullback ranging from the broadly persistent US Dollar (USD) weakness to the hidden chances of the EU’s co-operation for the Brexit.

The greenback continues to be market’s despicable currency as traders consider the US Federal Reserve’s dovish tone as a signal for the upcoming bear-run amid a slew of weak data. Adding to the US currency’s weakness could be the US-China trade tussle and the US political tension with Iran.

At home, the British Prime Minister (PM) Candidate Boris Johnson appeared for the interview with the BBC. Mr. Johnson repeats his Brexit deadline pledge while showing preparedness to take help of the EU sources in case of a hard Brexit and/or Irish border issue where he favors soft boundaries.

While results of the CBI Distributive Trade Survey (MoM) for June becomes the only data from the UK, the S&P/Case Shiller Home Price Index and Housing Price Index for April, June month CB consumer confidence and May month New Home Sales will decorate the economic calendar from the other end, i.e. the US.

While UK’s trade survey previously revealed -27% depletion, the US consumer sentiment gauge grew 134.1 during earlier readouts. Moving on, the home price index could soften to 2.6% from 2.7% whereas the housing price index might rise to 0.2% from 0.1%.

Furthermore, another candidate for the UK PM’s race Jeremy Hunt will be interviewed tomorrow and will grab the market attention in conjunction with the Bank of England’s (BOE) quarterly inflation report hearings.

Technical Analysis

The 1.2660/70 area comprising current month tops continues to act as the key upside barrier holding the gates for 50-day simple moving average (SMA) level of 1.2810 and the April month low near 1.2865. Alternatively, 1.2670 and 1.2610 acts as nearby supports head of May-end low of 1.2560.

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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