Home GBP/USD: Bulls await BOE’s Bailey to keep mild gains above 1.2900
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GBP/USD: Bulls await BOE’s Bailey to keep mild gains above 1.2900

  • GBP/USD keeps previous day’s recovery moves from 1.2844.
  • Pubs and restaurants in Northern England go off from next Monday with UK’s 14,162 new daily cases of COVID-19.
  • EU keeps hardstand on fisheries, Tories threaten to leave talks on October 15.
  • BOE’s Bailey will speak in an online panel discussion at the Single Resolution Board’s annual conference.

GBP/USD seesaws around intraday high, at 1.2929 now, while heading into Thursday’s London open. The Cable extends Wednesday’s rebound as the US dollar remains offered following the VP debate. This helps buyers to ignore fears of stricter local lockdowns in the UK as well as Brexit pessimism ahead of BOE Governor Andrew Bailey’s comments in the online panel discussion.

With the UK’s national count of the coronavirus (COVID-19), rising past-14,160 on Wednesday, parts of northern England may follow tough activity restrictions in Scotland from Monday, per The Sun. Following the update, a representative from the UK’s Office for Budget Responsibility, Charlie Bean, ex-BOE Deputy Governor, mentioned that a sharp rise in coronavirus cases is likely to cause Britain’s economic recovery to stall until the resurgence comes under control.

Brexit headlines aren’t also positive even as private talks continue in London. While the Head of European Parliament’s fisheries committee continues to press for more, the UK’s Chief negotiator David Frost has already told, per Reuters, that Britain will need to keep negotiating with the European Union even if a full free-trade agreement is not possible.

Talking about US politics, the Vice Presidential Debate couldn’t go well but helped to keep the market’s happy amid hopes of further stimulus. The reason can also be traced from the early-Asian tweets from US President Donald Trump that renewed vaccine and aid package hopes.

While the risk-on mood favor Asia-Pacific shares and S&P 500 Futures to print gains, the US dollar index (DXY) remains on the back foot for the second day amid a lack of safe-haven demand.

Looking forward, GBP/USD buyers hope Bailey to follow the footsteps of BOE Chief Economist Andy Haldane while repeating his recent bullish comments over negative rates. Though, any disappointment may not refrain from dragging the quote back below 1.2900.

Technical analysis

The 1.3000 psychological magnet is on the bulls’ radar as GBP/USD bounces off 100-bar SMA. Though, any further upside becomes less likely. On the contrary, a downside break of 100-bar SMA, at 1.2868 now, can aim for the September 30 low near 1.2800.

 

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