- Disappointing CBI data, hard-Brexit fears cap the GBP/USD pair’s upside.
- Latest positive comments from the UK PM candidate limit the declines.
- BOE’s quarterly inflation report hearing, the Governor Carney’s speech is on the spotlight for fresh clues.
Having reversed from the 50-day SMA, mainly because of renewed Brexit fears and sluggish data from the UK’s CB retail sales survey, the GBP/USD pair trades modestly flat near 1.2685 ahead of the London open on Wednesday.
In addition to the UK Prime Minister (PM) candidate Boris Johnson’s pledge to crash out of the EU on October 31 and sluggish CBI data, less dovish comments from the US Federal Reserve policymakers also triggered the Cable’s recent pullback.
While Boris Johnson threatened to follow World Trade Organization’s (WTO) rules for Brexit if the EU refrains from cooperating, his competitor Jeremy Hunt said, during his latest interview to the BBC, that he’ll only support no-deal Brexit if there is no better option to discuss with the EU. Even if the statement sounds almost similar to Mr.Johnson, it reveals Hunt’s respect towards the EU.
Looking forward, quarterly inflation report hearing by the Bank of England (BOE) policymakers and a press conference by the Governor Mark Carney will be closely observed for fresh clues. On the other hand, the US Durable Goods Orders for May month and comments from the Federal Reserve Bank of San Francisco’s Chief Mary C. Daly will also play their role to entertain traders.
The forecast suggests, the US Durable Goods Orders to inch up from -2.1% to +0.2% whereas Nondefense Capital Goods ex-Aircrafts could rise to +0.1% from a downwardly revised previous readout of -1.0%. Further, the Fed’s Daly will be observed to seek confirmation of recent rhetoric from the US central bank lawmakers.
The BOE’s inflation report hearing might emphasis more on the recent market developments considering the 2-month old age of the report. As a result, Carney & co. could awail the opportunity to be optimistic.
Technical Analysis
A 50-day simple moving average (SMA) limits the pair’s immediate advances near 1.2800, a break of which can propel prices to April low around 1.2865 whereas 21-day SMA level of 1.2667 confines the short-term downside prior to highlighting May low close to 1.2560.
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