- UK PM Johnson adds another few billions to safeguard against the no-deal Brexit.
- The USD remains under pressure due to trade tension with China.
- Services PMIs from the UK and US are in the spotlight.
Despite parliamentary recess in the UK, the Prime Minister (PM) Boris Johnson and his team keep preparing for a no-deal Brexit, which in turn exerts downside pressure on the GBP/USD pair ahead of the key Services PMI data for July. At the time of writing, the quote drops to 1.2150 heading into the UK open on Monday.
While some among the Conservative party doubt over the PM Johnson’s ability to crash the UK out of the EU without any deal, several others including the British Brexit negotiator and a top ally to Mr. Johnson continue to increase odds that such an outcome isn’t totally out of his to reach.
Elsewhere, policymakers are on the round to announce additional budget as a part of their preparations for the no-deal Brexit. Following a late last-week announcement of £2.1 billion funding by UK Finance Minister Sajid Javid, PM Johnson pledges extra £1.8 billion during early Monday in Asia.
On the other hand, the US Dollar (USD) fails to enjoy upbeat employment data and the Fed’s not-so-dovish rate cut as it bears the burden of the US-China trade tussle that is likely turning towards another stop in the negotiations.
Moving on, July month Purchasing Managers’ Index (PMI) numbers for the UK and the US services activities will be on the traders’ watch-list during the day, not to forget about the trade/political news.
While the UK Services PMI and the US Markit Services PMI are less likely to deviate from their respective priors of 50.2 and 52.2, likely improvement in the US ISM Non-Manufacturing PMI to 50.5 from 50.1 can help the USD to recover some of its recent losses.
Technical Analysis
Having repeatedly failed to rise past 100-hour exponential moving average (EMA) level of 1.2178, sellers are targeting 1.2080 ahead of betting on 1.2000 round-figure. Meanwhile, an upside clearance of 1.2180 highlights 200-hour EMA level near 1.2250.
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