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  • GBP/USD struggles near weekly lows.
  • Brexit uncertainty joins the broad USD recovery amid US-Iran tension.
  • Traders await UK/US data, FOMC minutes and Brexit/political headlines for fresh impulse.

GBP/USD stays modestly changed to 1.3140 while heading into the London open on Friday. The pair dropped the previous day on broad USD recovery but is recently waiting for fresh clues to extend the downside.

The US dollar (USD) stays on the front foot as the year-start increase got another boost from the US-Iran tension. The greenback gains popularity, due to its safe-haven appeal, among the traders after the US killed key Iranian military personnel in airstrikes in Baghdad.

Read: US officials confirm responsibility for missile attack at Baghdad airport, killing Qassim Soleimani

While portraying the same moves, S&P 500 Futures and most of the Asian stocks weigh down amid the risk-off mood.

On the other hand, the European Union’s (EU) recently tough stand against the UK PM Boris Johnson’s pre-election pledges increases odds of the hard-Brexit. Additionally, the Tory leader’s close aide, Dominic Cummings, has recently called for drastic changes in civil services but is largely criticized due to the payment caps.

Even so, the British pound (GBP) seems to wait for the final reading of the UK Construction PMI and other second-tier, concerning the housing market, to extend the previous momentum. Also, minutes of the latest FOMC meeting and US Manufacturing PMI will also be the key to watch.

Elsewhere, concerns over the tough phase-two talks between the US and China have recently gained market attention.

Technical Analysis

21-day SMA, near 1.3120 now, holds the key to further declines towards an upward sloping trend line since October 10 around 1.3000. Alternatively, the weekly high surrounding 1.3285 and December 16 low around 1.3320 could lure buyers during fresh recovery.