GBP/USD benefits from UK/US trade optimism amid British political plays
|- GBP/USD stays above 100-day EMA as the US-UK leaders agree over a trade deal by July 2020.
- Tories keep lagging behind EU’s expectations while the opposition Labour party leader Jeremy Corbyn grabbed the headlines.
The GBP/USD pair benefited from the Sun’s story favoring the US-UK trade deal at the time of no fresh Brexit headlines. The quote takes the bids to 1.2490 while heading into the London open on Monday.
The US President Donald Trump and the United Kingdom’s (UK) Prime Minister (PM) recently agreed to sign a trade deal by July 2020 in a lightning-fast speed says the Sun. However, no major details have been shared for the same.
On the Brexit front, the EU-UK Brexit negotiators are still at loggerheads as far as the Irish border issue is concerned. Latest news from the Financial Times (FT) conveys the EU’s lack of appreciation to the British proposals concerning Irish backstop. Though, both the teams will still debate the issue for some more time before heading to the United Nations’ conference. Elsewhere, the opposition Labour party will vote for party agenda for the referendum after elections where the leader Jeremy Corbyn recently surprised fellow politicians by saying that the UK will be better off the EU. Furthermore, the case against the UK PM’s parliament prorogation will be discussed in the Supreme Court with a final hearing likely to roll out on Tuesday.
On the other hand, the US-China trade drama continues with the Chinese delegates’ early leave from the US spreading negative vibes while the geopolitical tension from the Middle East also contributing to the US Dollar (USD) demand.
Given the lack of major data/event scheduled for publishing, investors will keep an eye over the monthly purchasing manager index (PMI) numbers for the US while also taking care of the trade/political news. Further, the European Central Bank’s (ECB) conference in Frankfurt will also offer speeches from some key central bank policymakers and hence should be observed closely.
Technical Analysis
100-day exponential moving average (EMA) level of 1.2470 could keep limiting pair’s near-term declines, highlighting the importance of 200-day EMA level of 1.2660 as the key resistance. In a case of pair’s declines below 1.2470, 1.2385/80 seems to please bears.
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