- GBP/USD again refrains from breaking 50-day SMA.
- UK PM Johnson signals preparedness to avoid Brexit delay law despite witnessing challenges to political career.
- UK GDP, details from the Conservative Conference will be in the spotlight.
Although the weekend news from the United Kingdom (UK) has been downbeat, as usual, the GBP/USD pair repeats its bounce off 50-day simple moving average (SMA) as it trades near 1.2300 during the initial Asian session on Monday.
The UK Prime Minister (PM) Boris Johnson recently got another bad news, as conveyed by The Guardian, after allegations against mishandling of public funds while being the London Mayor were referred to the police watchdog. However, the Tory leader seems to have less tension concerning the same as his latest Brexit communication signals firm commitment to exit the EU block on October 31, even at the cost of avoiding the law that pushes him to delay the departure and is duly passed by the UK Parliament.
Markets seem habituated to such news while Brexit positive comments from the UK Trade Minister Mary Elizabeth Truss and Chancellor of the Duchy of Lancaster Michael Gove can be considered as additional reasons to limit traders’ reaction to earlier negative headlines.
While final reading of the second quarter (Q2) Gross Domestic Product (GDP) from the UK and the Chicago Purchasing Mangers’ Index (PMI) for September from the United States (US) could decorate today’s economic calendar, updates from the Annual Conservative Conference might portray political plays surrounding Britain.
The UK GDP is expected to print a +0.5% mark versus -0.2% initial estimate while the US activity gauge may improve to 50.5 from 50.4. Further, recent markets speculations signal that the Tories will come up with a strong Brexit plan after the Conference and hence traders will be on the lookout of any signals concerning the same for fresh impulse.
Technical Analysis
While the 105 pips range between the 21-day and 50-day SMA levels of 1.2365 and 1.2260 can keep the pair’s moves limited, the bearish signal from the 12-bar moving average convergence and divergence indicate overall downside pressure on the quote.
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