Search ForexCrunch
  • The lack of UK data highlights politics and trade catalysts.
  • Brexit uncertainty still looms large despite intermediate relief to PM May.

With the UK politics providing a little clarity over Brexit/PM May’s position, caution ahead of the US-China trade negotiations offered fewer moves to the GBP/USD pair, around 1.3010 now, ahead of the London open on Thursday. Given the absence of data from the British side, Brexit, trade and the US statistics could become market movers.

Earlier on Thursday, reports from Bloomberg and the Financial Times conveyed positive signals out of the UK. The Bloomberg report said that the Tories have let the rules to challenge the PM Theresa May’s position unchanged despite growing calls from backbenchers to oust her. On the other hand, Financial Times said that the PM May offered to come up with a Brexit deal beyond May 23.

However, the cross-party Brexit talks continued to remain in limbo as neither Tories nor Labours is ready to lose their demands. As a result, Brexit developments could keep pushing traders to the edge.

Elsewhere, the US President Donald Trump gave another challenge to the lawmakers to agree over a trade deal as he spoke at a rally. President Trump said China broke the deal during trade talks.

While Chinese Vice Premier Liu He’s Washington visit is something everybody on the floor is worried about, the US producer price index, initial jobless claims, trade balance, and the Federal Reserve Jerome Powell’s speech can also inflate momentum.

China has started flashing negative signals and the US data may sound positive, except likely bigger trade deficit. Fed’s Powell might follow the latest trend of easy central banks and can challenge the greenback strength.

Technical Analysis

Should prices slip under 100-day simple moving average (SMA) of 1.3000, 200-day SMA level near 1.2960 and April low at 1.2865 can entertain sellers.

Meanwhile, 50-day SMA level of 1.3100, 1.3115 and 1.3180 can restrict the quote’s immediate upside.