- British lawmakers, including some Tories, challenged the PM hopeful Boris Johnson’s readiness to prorogue the Parliament.
- Voting at the UK’s House of Commons and monthly Retail Sales will be the key to watch.
With the latest news reports favoring the odds for soft Brexit, the GBP/USD pair recovers to 1.2440 ahead of the London open on Thursday. While voting at the House of Commons will be the key, British Retail Sales numbers could also entertain momentum traders amid lack of big data/events from the US.
On Wednesday, the UK’s House of Lords passed an amendment that limits the Prime Minister (PM) from dissolving the Parliament until October 31, the Brexit day. The amendment will now reach the House of Commons for a vote to become a law that will pave the way for soft Brexit expectations as the frontrunner to the PM’s race, Boris Johnson, keeps repeating his pledge to leave the bloc on by October 31.
Not only Mr. Johnson’s readiness to dissolve the parliament, if needed, to deliver on-time Brexit, but fears of economic setbacks indicated by the Morgan Stanley and expected to be pointed by the UK’s Office for Budget Responsibility’s (OBR) five-year forecast also questioned the market optimism.
On the other hand, the US Dollar (USD) witnessed overall pullback mainly on early-day news reports concerning the House of Representatives limiting Saudi arms deal and Turkey’s likely resentment over the removal from the F-35 program. Further, the US-China trade tussle also weakened the greenback during Asian session.
While likely successful passage of the House of Lords’ amendment and improvement in the June month British Retail Sales, to 2.6% from 2.3% (YoY) and -0.3% versus -0.5% (MoM), could please the pair buyers, sellers could keep cheering OBR report.
Technical Analysis
A sustained break beyond July 10 low, near 1.2445, becomes necessary for buyers to target Monday’s low close to 1.2510 and the weekly top adjacent to 1.2580, failing to which can recall 1.2380 and 1.2340 on the chart.
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