- GBP/USD dropped in early Asia on UK political prospects.
- Bulls step in to defend downside, yet remain well below par.
- Key UK data on the horizon, so lack of follow though unlikely.
GBP/USD is attempting to recover from the early Asia lows where a sell-off ensued, sending the currency over a cliff in thin markets, GBP/USD dropped to a low of 1.3279 from a high of 1.3335.
Currently, GBP trades at 1.3280 and is still -0.40%. One might expect some positioning ahead of the UK open today as we have unemployment and average-earnings data, although there are blatant risks to long GBP at this juncture explained in more detail here.
There are a number of risks for GBP bulls to consider
In short, a Telegraph news highlighted how a hard Brexit is still a real possibility considering the majority that PM Boris Johnson has and his intent of getting the UK out of the EU as soon as possible.
“The Prime Minister will use his huge majority to push through a radically altered bill that will prevent Parliament from extending the transition period beyond Dec 31 next year,” the article read.
Key data ahead
“A busy week of UK calendar is worth watching ahead of the Bank of England policy meeting on Thursday. Consensus is for the unemployment rate to tick up to 3.9% while wages growth eases a little to 3.4% year,” analysts at Westpac explained.
GBP/USD levels
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