- US Dollar decline refrains from respecting the British Pound (GBP) amid political pessimism at the UK.
- British Construction PMI, global political headlines and BOE Governor Carney’s speech will be on the spotlight.
The GBP/USD pair fails to portray the latest pullback of the US Dollar (USD) amid political uncertainty at the UK. The quote takes the rounds to 1.2642 while heading into the London open on Tuesday. Monthly Construction PMI data and speech from the Bank of England (BOE) Governor Mark Carney will be the key to watch going forward.
Having registered across the board gains, the greenback witnesses profit-booking during early Tuesday as global traders asses recently positive signs from the US-China trade truce. Doubts were triggered after China’s Huawei said it is still to get orders from the US Commerce Department.
On the other hand, the frontrunner for the UK Prime Minister’s (PM) post, Boris Johnson, is considering a proposal to cut short the British Cabinet by merging/removing few departments off the government if he becomes the PM, as reported by The Telegraph.
Also weighing on the British Pound (GBP) could be multi-year low of Markit Manufacturing PMI data released on Monday.
Although trade news and global politics will keep dominating market sentiment, the UK Markit Construction Purchasing Managers’ Index (PMI) for June could also entertain traders. The activity gauge is expected to remain mostly unchanged at 49.00 versus 49.1 prior.
Furthermore, the BOE Governor’s speech carries higher importance as investors seek clues of future monetary policy amid uncertainty surrounding the Brexit.
Technical Analysis
Unless clearing 50-day exponential moving average (50-D EMA) level of 1.2764, chances of the pair’s decline to 1.2566 and June swing low of 1.2532 can’t be denied. Meanwhile, April month bottom surrounding 1.2865 can please buyers past-1.2764.
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