GBP/USD: On its way to third daily loss ahead of UK Services PMI

GBP/USD remains under pressure for the third consecutive day.
Doubts surrounding the UK PM’s victory in the December election, increasing odds of the US-China deal weigh on prices.
UK Services PMI, US data will keep traders entertained while trade/Brexit headlines could occupy the driver’s seat.

Anil Panchal FXStreet

Other than trade positive sentiment, recent uncertainties surrounding the UK PM Johnson’s victory in the snap election also weigh on the GBP/USD pair as it declines to 1.2880 ahead of the London open on Tuesday.

Be it the trade positive statements from the United States (US) President Donald Trump or Financial Times (FT) headlines indicating the US administration considering to roll back some of its earlier tariffs on China, everything boosts the odds of an initial trade deal between the US and China.

While the same is more playing positive for the US Dollar’s (USD) present run-up, downbeat political plays in the United Kingdom (UK) contribute to the pair’s weakness. A Labour-party member as the House of Commons’ speaker and questions over the Prime Minister’s (PM) role in silencing reports about Russian intervention in British politics seem to signal additional hardship for the UK citizens. Also increasing the pessimism is the Brexit party leader Nigel Farage’s latest swing to put nearly 600 candidates for the upcoming snap election in December to cut votes from the Conservatives and hold a command in negotiations.

Although the October month reading of Services Purchasing Managers Index (PMI) from the UK will be in the spotlight for the British Pound (GBP) traders, ISM Non-Manufacturing PMI, second-tier jobs data and trade balance will decorate the US economic calendar.

“We look for the services PMI to dip slightly further into contraction territory at 49.2 in October (mkt 49.7). While the manufacturing PMI managed to bounce a bit on an inventory building ahead of the 31 October deadline, as it did in March 2019, the services PMI actually performed the worst out of the three PMIs in March, so we think has a bit more downside potential no,” says TD Securities concerning the UK PMI. On the other hand, Westpac has something to say for the US data, “the US data focus is the Oct non-manufacturing ISM survey. The consensus is for an improvement in the overall index from 52.6 (a low since 2016) to 53.4. The US Sep trade balance is also due, expected around -$53bn.”

Technical Analysis

Only if the pair declines below 1.2787/75 area including 21-day Simple Moving Average (SMA), June high and October 24 low, the quote can revisit late-September levels near 1.2580 otherwise chances of its another run-up to 1.3000 prevail.

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.

EUR/USD falls to near 1.1600 due to persistent bearish bias

EUR/USD depreciates after registering modest gains in the previous session, trading around 1.1610 during the Asian hours on Thursday. The technical analysis of the daily chart suggests a persistent bearish bias as the EUR/USD pair remains within the descending channel pattern.

GBP/USD underperforms as UK faces stagflation risks amid Middle East war

The Pound Sterling trades lower against its major currency peers, is down 0.22% around 1.3340 against the US Dollar, during the Asian trade on Thursday. The British currency faces selling pressures amid fears that the United Kingdom economy could face stagflation risks due to higher energy prices, a situation in which inflation accelerates with economic growth and employment conditions remaining stagnant.

Gold buyers stay hopeful amid Middle East war, China growth woes

Gold is building on the previous rebound in Thursday’s Asian trades, testing offers once again at the $5,200 threshold. Deeper escalation of the Middle East war and dovish US Federal Reserve monetary policy outlook continue to support Gold.

Top Crypto Gainers: Decred, Zcash, and Dogecoin lead recovery as Bitcoin crosses $72,000

Bitcoin trades above $72,500 at press time on Thursday, holding its 6% gain from the previous day, contributing to a broader market recovery. The total cryptocurrency market capitalization stands at over $2.43 trillion as the broader market sentiment improves significantly.

First Venezuela, now Iran: The US-China energy war escalates

At first glance, the latest escalation involving the United States with both Iran and Venezuela looks like another chapter in a long-running geopolitical story. But viewed through a broader strategic lens, something else may be unfolding: Energy.

Bittensor extends recovery despite retail demand slump

Bittensor, a leading Artificial Intelligence token, is aging up above $190 at the time of writing on Wednesday. Steady price increases characterise the broader crypto market, with Bitcoin holding above $71,000 and Ethereum above $2,000.