- GBP/USD remains in the range despite challenging Brexit headlines.
- DUP refrains from support altering Irish backstop, EU leaders doubt PM Johnson’s performance.
- US Retail Sales, Michigan Consumer Sentiment Index, trade/political headlines will be the key to watch.
Despite flashing a doji candle on yesterday, GBP/USD stays range-bound for almost a week while taking rounds to 1.2345 ahead of the London open on Friday.
Even if yesterday’s doji candle signals reversal of present recovery, struggle by the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson seems to please the Cable buyers as it finally indicates either a soft Brexit or no departure at all.
The European leader has been disappointed with the UK’s working style and claimed no strong solution have come up from Britain. On the other hand, speculations that the Democratic Unionist Party (DUP) will support a mild change in Irish backstop to ease Mr. Johnson’s pain were largely being torn down by the DUP leader.
Elsewhere, the UK PM is on his run-up to please the regional leader and another bi-weekly meeting will be held today. Though, no breakthrough is expected considering the closure of the parliament and Irish backstop situation.
On the other hand, the US Dollar (USD) might initially react to the expected weakness in August month Retail Sales figures but could later on recover based on likely upbeat print of consumer sentiment gauge for September.
Adding to note, the global market sentiment carries the previous risk-on amid the US-China trade positive gestures while equities and bond yields also follow the suit.
Technical Analysis
While 1.2300 and 1.2345 levels define the short-term range, overall weakness can’t be denied unless breaking 1.2380/85 area including July 17 low and current week high. On the contrary, , pair’s daily closing below 50-DMA level of 1.2275 can fetch the quote to an early-August high near 1.2210.
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