GBP/USD: Modestly changed to 1.2915 amid fears of UK election

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  • GBP/USD awaits the EU’s word on Brexit extension, ignores fears of a general election, the second referendum.
  • No major British data highlights the US economic calendar, trade/Brexit news as the key catalysts.

Despite mounting speculations of a general election in the UK, GBP/USD clings to 1.2915 during early Thursday morning in Asia.

Be it the ITV interview of the United Kingdom’s (UK) Chancellor or the UK Times story, everything signals increasing odds for a general election, not to mention the opposition Labour party’s mild push for the second referendum.

However, the key to the likely election is the European Union’s decision over the British request to extend the Brexit deadline from October 31.

The Cable reacted positively to rising expectations of a soft Brexit after various news sources confirmed that the EU will wait till Friday, possibly till early Monday, before announcing its verdict on the Brexit extension.

With this, the market’s risk-tone improved and could be well witnessed in the performances of the US 10-year treasury yields and Wall Street.

Adding to the pair’s strength could be the US Dollar (USD) weakness on the back of downbeat prints of second-tier housing and Mortgage Applications data, coupled with upbeat news concerning the US-China trade deal.

While no major economics are up for publishing form the UK’s side, investors will observe the United States’ (US) economic calendar that carries monthly readings of Durable Goods Orders and some more housing numbers, not to forget weekly jobless figures.

Technical Analysis

The Cable bulls are waiting for an upside break of 1.3015 to aim for 1.3100 and May month top surrounding 1.3180 while pair’s declines below 1.2840 can recall June month high around 1.2785 and 200-day Simple Moving Average (SMA) level of 1.2715.

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