- GBP/USD stays mildly bid for sixth consecutive day, cheers US dollar weakness.
- UK’s covid recovery joins strong vaccine position but Brexit woes probe optimism.
- UK’s Gove, EU’s Šefčovič will try to resolve Northern Ireland protocol row in London, pre-meet accusations continue.
- Biden-Xi talks entertained markets, US Jobless Claims to decorate the calendar.
GBP/USD stays firm around the mid-1.3800s, intraday high, while heading into London on Thursday. In doing so, the cable cheers the UK’s ability to combat the coronavirus (COVID-19) amid US dollar weakness near the highest since April 2018, marked the previous day. However, buyers seem cautious following the latest US-China tension and worries of another confrontation between the European Union (EU) and Britain in London.
Although European Commission vice-president Maroš Šefčovič might have just board onto the flight to the London, media reports of Brussels firing warning shots at the UK over Northern Ireland (NI) protocol probe sentiment. Also on the negative side could be the EU’s rejection of the British request to overturn an export ban on live shellfish including types of oysters, clams and mussels, escalating a dispute over seafood, per the Financial Times (FT).
Additionally, Reuters quotes the UK’s dislike for the European share trading center moves while the British Chambers of Commerce (BCC) survey marks Brexit trouble on 50% of British exports.
On the positive side, UK’s Health Secretary Matt Hancock and Prime Minister (PM) Boris Johnson both tried to keep up the hopes of strong vaccine power while mixed updates over the covid figures and rejection of claims that death-toll jumped also favored the Cable.
Elsewhere, US President Joe Biden talks to his Chinese counterpart for the first time after taking the office. However, the Sino-American terms remain the same due to the American dislike for Chinese policies and Beijing’s warning over Hong Kong, Taiwan and Xinjiang.
It’s worth mentioning that the off in China and Japan limits the market moves in Asia but the latest risk news may entertain momentum traders during the European and the US session. In doing so, updates from the UK will be the key as the EU and Britain will not easily agree over the thorny issue.
Ahead of the issues, Reuters said, “The European Union will ask Britain if it can take an extra two months to ratify the Brexit trade agreement by extending until April 30 provisional application of the deal.” On the other hand, FT cites warning shots by EU’s Šefčovič over UK’s inability to respect Brexit terms over NI while turning down the British request for easy travels between the UK and Northern Ireland.
Given the likely negative news from London, GBP/USD is expected to recede bullish bias. However, any surprise positives will have a greater impact on prices.
Technical analysis
GBP/USD bulls targeting early-April 2018 low near 1.3970 seem tiring off-late. However, sellers will not risk taking entries unless witnessing a downside break of previous resistance, January’s high, around 1.3760.
Share
