- GBP/USD wavers around intraday low after snapping a four-day uptrend.
- Bloc members to push the European Commission for no-deal Brexit preparations, UK policymakers were hopeful earlier.
- UK PM Johnson works in self-isolation, New York shuts down the schools amid virus woes.
- China’s response to ‘five eyes’, EU Summit becomes the key.
GBP/USD consolidates intraday losses around 1.3230, down 0.28% on a day, while heading into the London open on Thursday. The Cable dropped recently as The Times triggered chatters over no-deal Brexit. Also weighing on the quote could be the risk-off mood taking clues from the coronavirus (COVID-19) updates and ire against China’s Hong Kong crackdown. Though, traders are cautious ahead of the key European Union (EU) summit starting from today.
All eyes on the EU summit…
Even as the key bloc members like France, Belgium and the Netherlands are frustrated over the Brexit discussions, as The Times puts it, the UK policymakers have been cautiously optimistic in their latest comments. UK’s Business Secretary Alok Sharma joined hands with EU Trade Commissioner Valdis Dombrovskis to convey nearness to the much-awaited deal. However, chatters that Poland, Hungary and France aren’t that satisfied keeps the risk elevated.
Although the Brexit matter is likely to be discussed in the EU Summit on Friday, any early signals will be the key for the GBP/USD traders to watch.
Elsewhere, the pandemic resurgence is firming its grips outside Europe and the US. Tokyo recently escalated the alert levels to the highest while South Australia also toughened the activity restrictions earlier in the session. While the vaccine hopes are gradually building, the fact that their availability to the final users will take time seems to dim the sentiment.
Furthermore, a group including the UK called ‘five eyes’ recently criticized China’s crackdown on Hong Kong and rekindled hopes of a fresh trade/political war between the West and China.
Against this backdrop, Futures in the US and the UK have been mildly offered while stocks in Asia trade mixed by press time.
Moving on, the EU summit and the virus updates will be the key for fresh impulse while second-tier housing data from the US can offer intermediate moves.
Technical analysis
Despite the latest fall, GBP/USD is yet to confirm the downside break of a short-term ascending triangle. As a result, further selling needs a clear break below 1.3220 while targeting a confluence of 100-bar SMA and the mid-November lows near 1.3105/3100 area.
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