- Profit booking moves on the back of greenback weakness.
- Brexit hardliners lead the race to next UK PM.
- Sluggish data at home amid likely further negatives from hard Brexit.
With the US Dollar (USD) latest pullback after yesterday’s surge, the GBP/USD pair is on the recovery mode towards 1.2700 during early Tuesday.
The Cable dropped to multi-day low as the week’s start after sluggish production and GDP data from the UK couldn’t confront the greenback’s broader strength.
With the race for Britain’s next PM seems giving Brexit hardliners an upper hand, the right-wing Tories held voting to gauge the popularity of final 10 candidates. Out of no surprise, Boris Johnson led the poll, which in turn signal tough days for the EU to negotiate Brexit and increases chances of a hard exit around October 31.
Additionally, Reuters published a survey of Bibby Financial Services that confirms the UK construction firms are having almost a third less work to do than the last year.
Despite political/economic backlash at home, the Cable manages to recover as the USD comes under pressure after latest comments from the US lawmakers signal their hard stand against China and increase chances of further trade wards between the world’s two largest economies.
Moving on, the UK employment data and the US PPI are in the spotlight from the economic calendar while developments surrounding the US-China trade and race to next UK PM could keep entertaining momentum traders.
Technical Analysis
Unless breaking 1.2640, the pair is less likely to extend the latest weakness in the direction to 1.2600 and May-end low near 1.2560. As a result, 1.2770 and April month bottom at 1.2865 can keep being on buyers’ radar.
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