- GBP / USD has a five day losing streak as Brexit / virus issues weigh on the cable.
- The European Commission has launched legal action against the United Kingdom and Northern Ireland, fisheries remain difficult points in the Brexit negotiations.
- The UK must order antibody kits from Roche because 1 in 5 Londoners have been infected with the virus.
- Retail sales in the United States and the Michigan Consumer Sentiment Index are key.
GBP / USD hovers around 1.2210, down 0.14% on a day as it headed for the London Open on Friday. However, the pair is up for the largest weekly losses in eight as Brexit worries, the pessimism of the coronaviruses (COVID-19) and US dollars force is hanging on the cable. Therefore, pair traders will pay close attention to today’s consumer-oriented US data for a new direction.
Brexit talks also remain difficult…
As the European Union (EU) and UK negotiators continue to suspend Brexit talks by videoconference, European Commission (EC) legal action against the UK has made talks difficult. According to Politico, “the European Commission launched on Thursday an infringement procedure against the United Kingdom, accusing it of not complying with EU law on free movement”.
On the other hand, the British Prime Minister maintains his preference for border controls in Northern Ireland (NI), while the secretary of the NI, Brandon Lewis, again declared that there would be no border along the Irish Sea.
In addition, comments by the UK’s top negotiator, David Frost, suggest that the EU has asked for more from the UK than from other sovereign countries with which they have concluded free trade agreements.
The coronavirus continues to hover over Great Britain…
According to the latest research from Public Health England (PHE) and the University of Cambridge, around 6.5 million people in England, including 1.8 million in London, are infected with the virus, according to the UK Telegraph.
British government to negotiate with Swiss drug maker Roche Holding AG to prove it works to buy an accurate COVID-19 antibody test, led by the European Union and the United States , which have already given their preliminary approval. to the tests.
In the middle of it all BOE Governor Andrew Bailey remains ready to take further action but rules out rate cuts. In addition, the citizens’ panel of the British central bank expects COVID-19 to have a significant and lasting impact on the economy and society in general.
On the other hand, the US dollar takes advantage of the declining hope of fed as well as increased chances for government stimulus. That said, the Dollar Index (DXY), a gauge of the greenback against the major currencies, remains slightly higher at around 100.30 at press time.
Looking ahead, investors will keep an eye on US retail sales for the month of April and the Michigan Consumer Sentiment Index for May, which are expected to drop to -12% and 68% compared to the respective previous prices of -8.7% and 71.8. April data for retail sales are expected to show even more weakness than the March data, as the mood collapse from closings and social distancing did not begin until around mid-March. On the positive side, online consumer spending was probably boosted in late April by “salvage discounts”, and food and beverage store sales likely remained fairly strong, “analysts said. TD Securities.
A short term bearish wedge resistance, near 1.2330, protects the pair’s immediate rise, the break of which could trigger a further rise towards 1.2465 and 1.2500 numbers to the north. On the downside, the April low close to 1.2165 and the training support around 1.2150 can distance sellers by 50% and 61.8% Fibonacci the pair’s March-April pair retracement levels, respectively, near 1.2045 and 1.1900.