- GBP/USD stays modestly changed after a positive day.
- Increasing support for the UK PM’s Brexit deal, challenges to the USD support the Cable.
- Eyes on the Brexit/political headlines, US data, and Fedspeak.
Not only the EU and Ireland’s non-rejection to the UK PM’s Brexit proposal but reports of increasing support for PM Johnson’s plan at home and additional allegations against the US President also helps the GBP/USD pair to remain positive around 1.2330 during the early Asian session on Friday.
Following the United Kingdom (UK) Prime Minister (PM) Boris Johnson’s anticipated final Brexit proposal to the European Union (EU), the regional leaders seem not disappointed and suggested that the same becomes the ground for further discussion on the Irish backstop. The Irish counterpart, on the other hand, also didn’t turn the plan down despite being skeptic of its success. Even so, the Tory leaders’ efforts are likely gaining popularity at home as some 30 Labour rebels, as conveyed by the Sun, join the stand ready to support the deal pass through the House of Commons.
In addition to the Brexit optimism, the overall weakness of the US Dollar (USD), based on fears of recession and pessimism surrounding the President Donald Trump’s impeachment, also supported the Cable to ignore downbeat Services Purchasing Managers’ Index (PMI) figure.
Though, recent comments from the US Federal Reserve Vice Chairman Richard Clarida join a slew of Fedspeak indicating no clear guidelines of the US central bank’s next move.
It should also be noted that the recent headlines from the Washington Post (WaPo) and the Wall Street Journal (WSJ) can exert additional pressure on the United States’ (US) President. The WaPo highlights the complaint from the Internal Revenue Service (IRS) official alleging Treasury Department’s political appointee tried to interfere with the annual audit of the US President or Vice President’s tax returns whereas the WSJ story relies on anonymous sources to convey that the US President Trump ordered the removal of the ambassador to Ukraine Marie Yovanovitch.
Moving on, disappointing UK data pushes the investors to keep searching for the clues of the Bank of England’s (BOE) easy money strategy while Brexit and the US trade/political headlines could keep traders busy. Elsewhere, the US September month employment data and the US Federal Reserve Chairman Jerome Powell’s speech will also be the key to watch.
Technical Analysis
The Cable requires a sustained break above 21-day simple moving average (SMA) level of 1.2380 to question 1.2410 and 1.2500 resistances, failing to which could drag the quote back to the 50-day SMA level of 1.2250.
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