- Pound steady ahead of critical Friday for Brexit.
- US dollar holds onto gains amid risk aversion.
The GBP/USD dropped further and bottomed at 1.2889, reaching a fresh daily low. Cable then rebounded rising to 1.2935 as the rally of the US dollar lost momentum across the board.
Johnson to decide on Friday
The pound is also falling against the euro and the Swiss franc ahead of a critical day for Brexit. European Union leaders in Brussels issued a communiqué on Thursday mentioning concerns that progress on key issues of interest is still not sufficient for an agreement to be reached. They called London to do what is necessary to reach an agreement.
PM Johnson said will make a decision on Friday by the end of the summit on whether to continue negotiations or not. His decision will surely move pound’s crosses.
Regarding the US, data released on Thursday came in mixed. Initial Jobless Claims rose to 898K instead of falling to 825K as it was expected. On the upside, the Philly Fed jumped to 32, significantly above market consensus.
The US dollar held onto gain after the data, supported by the decline across global markets. In Wall Street the Dow Jones is off lows, falling by just 130 points or 0.45% and the Nasdaq drops 1.25%. The lack of agreement between the White House and Democrats for more fiscal stimulus weighed on market sentiment. Recently US House Minority Leader McCarthy said he’s not expecting a deal before the election “as Long as Pelosi is involved”.
From a technical perspective, technical indicators in GBP/USD are starting to favor the downside in the short-term. In order to clear the way to more losses, a firm break below 1.2900 is needed. If the pair manages to hold above 1.2870 a recovery back to 1.3000 should not be ruled out.
Technical levels
Share
