- UK PM candidate Boris Johnson tries to lure Tory voters with promises of faster Brexit.
- Manufacturing PMI and political plays are to offer direction for near-term trading.
With the global traders re-thinking on how the US-China could go along after the recent trade truce, coupled with observing the UK political plays, the GBP/USD pair trades modestly flat near 1.2700 while heading into the London open on Monday. Investors may now look for monthly Manufacturing PMI numbers for fresh impulse.
The US and Chinese leaders finally agreed to halt further escalation in a trade war for now. Though with key issues concerning the technology transfer and intellectual property rights still remaining unresolved, investors fear of problems during future negotiations between the world’s two largest economies.
Elsewhere, the UK Prime Minister (PM) candidate Boris Johnson continues to refrain from turning down the chances of hard Brexit but promises to form a “war cabinet” to deliver Brexit within the first 100 days of his mandate.
Further, the British Chambers of Commerce (BCC) recently said that the UK factories’ exports slumped to the lowest in four years.
Moving on, investors will keep an eye over the political handle not only to observe the Brexit happenings but also to gauge the trade developments between the US and China.
At the economic front, June month Manufacturing Purchasing Managers’ Index (PMI) data will be on the spotlight. The British Markit Manufacturing PMI is expected to remain under 50.00 mark by likely flashing 49.2 versus 49.4 prior whereas its counterpart from the US could remain unchanged at 50.1. Furthermore, the US ISM Manufacturing PMI is may soften to 51.0 from 52.1 earlier.
Technical Analysis
On the break of the latest low near 1.2660, the quote can revisit June 18 high around 1.2566 whereas June month bottom surrounding 1.2506 may please sellers afterward. On the upside, a sustained break of 21-day exponential moving average (21-D EMA) level of 1.2693 becomes necessary to aim for 1.2785 and May 21 top around 1.2815.
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