- GBP/USD eases from two-week top of 1.3157 flashed earlier in Asia.
- Bailey-Biden provided dual boost to the bullish move, Powell fails to please markets.
- Pre-NFP caution joins mixed headlines from US presidential polls, virus woes to probe the buyers.
GBP/USD consolidates gain from 1.3157, to currently around 1.3130, while heading into the London open on Friday. In doing so, the Cable marks 0.10% intraday losses amid cautious sentiment ahead of the US NFP data. To magnify the moves, the coronavirus (COVID-19) woes in the US and the UK joins the fears of a mixed Congress in the US.
With nearly 1,700 lead in Georgia, US President Donald Trump is likely to get another disappointment when the Democratic rival Joe Biden inches closer to 270 required votes to acquire the White House. However, the Trump administration has already challenged multiple results and is also near to keep the reins of the Senate. As a result, the US election results are still contested despite Biden’s increasing odds of being the next President.
Elsewhere, the latest COVID-19 tally from Reuters’ new cases rises by at least 120,533 on Thursday, making it the record daily increase. The update also highlights the death toll at 1,128. On the other hand, UK reports 24,141 new COVID-19 cases, 378 deaths, per Reuters.
While the US isn’t in a condition to call for a national lockdown, due to the on-going election announcements, Britain’s second round of activity restrictions seems to lose the required strength. Other than the failures to tame the pandemic, heavy criticism of the national lockdown by the Brexit Party leader Nigel Farage also increase the Tory members’ worries.
To nullify some of the problems, UK Chancellor Sunal stretched the furlough scheme and the BOE announced another round of the GBP150 billion asset purchase the previous day. The “Old Lady” also kept the benchmark interest rate unchanged at 0.10%. Though, what gained the market’s attention was Governor Bailey’s bullish comments that rejected fears of the double-dip recession. Meanwhile, Fed also refrained from any rate change but Chairman Jerome Powell couldn’t follow Bailey and exerted additional downside pressure on the US dollar.
Furthermore, nothing moves on the Brexit table, making both the parties to agree further talks.
Against this backdrop, trading sentiment remains mixed with the bulls catching a breather ahead of the key US employment data and final results from important swing states of the US.
Read: Nonfarm Payrolls Preview: Encouraging data but little action expected
Technical analysis
While the previous month’s high near 1.3180 restricts short-term GBP/USD upside beyond the recent high of 1.3157, the October 12 peak surrounding 1.3080 becomes immediate support to watch during the pair’s further weakness.
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