- GBP/USD rises for the third day despite recent pullback from 1.3110.
- Brexit talks to resume Tuesday, UK’s negotiator David Frost eyes deal in September.
- British Trade diplomat Liz Truss attacks the EU and the US before the talks, targets deal with Japan during this month.
- US-China tussle pushed back the trade deal review, call to resume Congress gains market attention amid a light calendar.
GBP/USD eases to 1.3098, up 0.10% on a day, while heading into the London open on Monday. The Cable cheers the US dollar’s fourth day of declines ahead of the key Brexit talks, starting from tomorrow. Even so, the US NY Empire State Manufacturing Index and risk catalysts can offer intermediate move, which in-turn becomes worth watching.
Earlier during the day, UK’s Secretary of State for International Trade Liz Truss crossed wires via The Telegraph while citing readiness to safeguard the Scotch whiskey from the US. The diplomat also criticized the European Union (EU) while failing to stand up to the Scottish interest. What’s surprising was the British policymaker’s unfriendly take on the US and signals for the in-principle trade agreement with Japan by the current month’s end.
Elsewhere, the UK’s Brexit negotiator David Frost is targeting a September trade deal after the recent chatter concerning the same time. In doing so, the British diplomat will have to overcome the key barriers like fishing and the level playing field, which in turn becomes less likely and may disappoint the Pound bulls.
On the other hand, US House Speaker Nancy Pelosi recalled the Senators from their month-long vacation to protect the post offices. However, market speculations eye any clues concerning the coronavirus (COVID-19) relief package that witnessed a deadlock before the policymakers announced recessed on Thursday. It should also be noted that the failure of diplomats from Washington and Beijing to review the trade deal during this Saturday joins the strengthening of the virus wave 2.0 to challenge the risk-on mood.
Against this backdrop, S&P 500 Futures gain 0.30% but stocks in Asia-Pacific alternate gains with losses amid mixed clues. Further, the US 10-year Treasury yields also drop 1.3 basis points (bps) to slip below 0.70%.
Moving on, a lack of any major data/events from the UK will push the pair traders to observe the US manufacturing data after Friday’s Industrial Production keeps the hope of recovery into the world’s largest economy. Forecasts suggest the private activity numbers to ease from 17.2 to 16.5 in July. Other than the data, risk catalysts like Brexit headlines, pandemic updates and trade news will also be the key as and when arrive.
Technical analysis
Although 10-day EMA restricts the pair’s immediate downside around 1.3055, bulls will keep struggling unless crossing 1.3200.
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