- GBP/USD extends pullback from 1.2363, highest since May 12, 2020.
- Fresh fears surrounding US-China tension, Hong Kong protests help greenback to bounce off 18-day low.
- Hopes of soft Brexit, Remdesivir usage in the UK fail to keep the pair buyers.
GBP/USD steps back from two-week top to 1.2320, down 0.11% on a day, while heading into the London open on Wednesday. Although optimism surrounding Brexit and the usage of the famous coronavirus (COVID-19) drug should ideally help the Cable extend the previous run-up, recent challenges to risks trigger the US dollar recovery and weigh on the quote. As a result, the pair traders are likely to pay a little more attention to the US-China story for fresh impulse.
Following the news that the European Union’s (EU) Brexit negotiator Michel Barnier was said to drop demand of unchanged access to the fishing grounds around the UK’s coast, Britain based pro-Brexit think tank came out with the upbeat analysis. “Robert Oulds, director of the Bruges Group, said the UK needed to head into the EU talks without any thoughts of further delay. The European Union will then know that we mean business in Britain,” said the UK Express.
Also on the positive side could be the BBC’s news saying, “a drug treatment called Remdesivir that appears to shorten recovery time for people with the virus is being made available on the National Health Services (NHS).”
On the contrary, allegations against the Tories not following the lockdown guidance and diverting the virus funds to own areas rather than poorer parts of England keep pilling pressure on the PM Boris Johnson-led government.
US President Donald Trump finally said the sanctions for China will be announced by the end of the week. Also favoring the greenback’s recovery from the lowest since May 01 could be calls of fresh protests in Hong Kong.
Given the lack of major data and the markets’ U-turn to the US-China tussle, previous optimism backed by the nearness to the pandemic cure and economic reopen seems to have faded off-late. As a result, GBP/USD traders may await further escalation in the tension between the world two top economies for additional direction.
Technical analysis
While bulls are cheering the MACD histogram’s favor after many days, fresh entries are likely awaiting the sustained break of 1.2370/80 area including 50-day EMA and a falling trend line from March 09. Meanwhile, the sellers may stay away unless witnessing a break of the ten-week-old rising support line, at 1.2170 now. Though, odds for further declines to Monday’s top near 1.2200 can’t be ruled out.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD resumes slide below 1.0500
EUR/USD gained modest upward traction ahead of Wall Street's opening but resumed its slide afterwards. The pair is under pressure in the American session and poised to close the week with losses near its weekly low at 1.0452.
GBP/USD nears 1.2600 as the US Dollar regains its poise
Disappointing macroeconomic data releases from the UK put pressure on the British Pound, yet financial markets are all about the US Dollar ahead of the weekly close. Demand for the Greenback increased in the American session, pushing GBP/USD towards 1.2600.
Gold pierces $2,660, upside remains capped
Gold (XAU/USD) puts pressure on daily lows and trades below $2,660 on Friday’s early American session. The US Dollar (USD) reclaims its leadership ahead of the weekly close, helped by rising US Treasury yields.
Broadcom is the newest trillion-dollar company Premium
Broadcom (AVGO) stock surged more than 21% on Friday morning after management estimated on Thursday’s earnings call that the market for customized AI accelerators might reach $90 billion in fiscal year 2027.
Can markets keep conquering record highs?
Equity markets are charging to new record highs, with the S&P 500 up 28% year-to-date and the NASDAQ Composite crossing the key 20,000 mark, up 34% this year. The rally is underpinned by a potent mix of drivers.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.