- The Brexit remains in jeopardy as PM May chooses to handle burden over a new leader.
- US President Trump’s UK visit and economic data/events will be observed for fresh impulse.
Despite mostly holding its earlier strength, GBP/USD refrains from further advances as it seesaws near 1.2670 during early Tuesday.
The Cable gave little importance to the UK manufacturing PMI’s drop to the lowest since 2016 Brexit referendum time as talks of the Fed rate cut grabbed major attention to weaken the US Dollar (USD).
At the political front, the US President Donald Trump reached Britain for a three-day state visit and conveyed his support to a trade deal with the economy post-Brexit. However, President Trump’s support for Brexit party and suggestion to send Nigel Farage for the talks with the EU gained little acceptance.
Else, the Financial Times reported that the UK Prime Minister Theresa May has stopped her efforts to put the Brexit deal on a vote during this week after policymakers asked for the second referendum during last month. With this, the new PM will have to bear the additional burden of Brexit deal during the short time to departure, i.e. October 31.
While the US President Trump’s visit can keep flashing headlines to entertain momentum traders, today’s UK construction purchasing manager index (PMI), speech from the Federal Reserve Chairman Jerome Powell and the US factory orders will be closely followed.
The UK PMI isn’t expected to deviate from 50.5 prior while the US factory orders could register -0.9% contraction over +1.9% previous growth. Further, comments from the Fed Chief will be in the spotlight amid latest clues favoring the rate cut.
Technical Analysis
Mid-January low near 1.2670, followed by 1.2710, seem to limit the pair’s near-term upside, which in turn highlights the importance of 1.2580, 1.2550 and 1.2480 consecutive supports.
Share
