- GBP/USD stays on the bids for the second consecutive day.
- The US dollar drops from one-week high as trade sentiment turns positive on hopes of the economic restart, virus updates.
- UK PM Johnson offers clarity on easing the lockdown restrictions, British government drawing plans to bail out key firms.
- US-China tussle fails to weigh on risks as US Trump President hasn’t yet uttered the Hong Kong issue.
GBP/USD takes the bids near 1.2215, up 0.20% on a day, while heading into the London open on Tuesday. With the market’s risk-on sentiment weighing over the US dollar, buyers keep the reins as the UK and the US return to trading after a long weekend.
Contributing to the US dollar weakness could be the market’s optimism backed by the global policymakers’ efforts to ease the coronavirus (COVID-19) led lockdown restrictions. While the UK PM Boris Johnson announced the opening of all non-essential shops from June 15, not more than 100 people will be able to gather for prayers in Californian churches. Not only the US and the UK, countries in the Middle East and some parts of Asia also showed readiness to restore market activities.
As portraying the greenback weakness against currency majors, the US dollar Index (DXY) prints 0.16% loss to 99.62 by the press time.
Other than the USD weakness, the Tory government’s plan to help big firms, including Tata Steel and Jaguar Land Rover, via loans and/or bailouts, also propels the Cable.
Even so, the Financial Times (FT) came out with the warning suggesting that the British business should stay ready for a no-deal Brexit. Further on the negative side could be the broad criticism of the UK PM Johnson’s handing of Adviser Dominic Cummings’s breach of lockdown restrictions. It’s worth mentioning that China’s Global Times have indirectly warned the UK to not interfere in Hong Kong issue while also alleging it of following the US footsteps on the decisions relating to Huawei despite supporting the firm in January.
Moving on, traders will keep eyes on the US-China tussle amid a lack of major data from the UK. While Chinese diplomats have already loaded Global Times’ headlines to hardly downplay the US policies, US President Donald Trump is yet to retaliate on the Asian major’s rush towards securing powers in Hong Kong.
Technical analysis
The pair’s current run-up seems to aim for a 50-day SMA level of 1.2275 ahead of targeting 1.2300 mark comprising high of May 19. On the downside, Friday’s low near 1.2160 can restricts the pair’s immediate declines ahead of the monthly bottom surrounding 1.2075.
Share
