- GBP / USD marks a five-day winning streak to turn around the 100-day SMA, still above 1.2500.
- British think tank warns excluded services from Brexit trade talks, BOE’s Bailey tells banks to prepare for exit without agreement.
- The US dollar rebounded from the three-month low against a backdrop of risk reset, before the ECB.
- US Jobless Claims and UK Construction PMI could also offer middle management.
After rising five consecutive days, the GBP / USD eases higher while falling to 1.2543, down 0.24%, before the opening of London on Thursday. In addition to Brexit concerns and news of the coronavirus (COVID-19), the rebound of the US dollar from the several-day low also contributed to the pair’s decline. While the markets were calm during the pre-ECB movements, the risk tone was also changed despite the absence of any major catalyst.
The US dollar index (DXY) rebounded from the lowest since March to 97.48, up 0.16% on a day, at the time of the press. The reason could be traced from the Newsmax interview by US President Donald Trump.
The Republican leader has shown himself ready not to use other armed forces to tame the protests while announcing no sanctions against his Chinese counterpart Xi Jinping. However, his optimistic comments regarding the recovery of the American economy seem to have put a little under the American dollar.
Bloomberg, on the other hand, quotes the British think tank while saying that “Britain’s dominant service industry is excluded from the country’s trade negotiations after Brexit, putting much of the economy at risk. significant damage. ” It should also be noted that Sky News spotted BOE Governor Andrew Bailey earlier, asking major banks to prepare for a Brexit without a deal.
Elsewhere, the UK is in talks with Huawei’s rival in China for 5G networks after creating a dispute with the Chinese company.
Regarding the virus, UK Secretary of State Alok Sharma was tested for COVID-19 after feeling bad when he appeared in the House of Commons.
Against this backdrop, yields on 10-year US Treasuries fell 2.2 basis points to 0.74%, while equities in the Asia-Pacific region also struggled to find a direction.
Although Brexit talks are unlikely to offer major positive signals, traders will keep their eyes on the ECB’s expected stimulus as well as the British PMI of construction, forecast 29.7 against 8.2 previously, could limit the immediate fall of the cable.
Not only would a 100-day SMA level of 1.2565, but the round figure of 1.2600 and the April peak near 1.2645 / 50 could also keep the bulls chained. Alternatively, the peak in early May near 1.2465 / 60 seems to be the immediate support to watch for during a new weakness.