GBP/USD: On the bids despite UK’s coronavirus woes, Brexit pessimism
- GBP/USD surges to the highest in nine days.
- Coronavirus cases in the UK surge, the US dethrones China as the most infected nation.
- The EU-UK Brexit talks stalled, UK PM Johnson accused to put Brexit over breathing.
- US House votes on the COVID-19 bill, virus updates become the key to watch.
While joining the chorus to cheer the US dollar weakness, GBP/USD pierces 1.2300, currently up 0.50% around 1.2265, ahead of the London open on Friday. In doing so, the Cable pays a little heed to the coronavirus (COVID-19) outbreak at home as well as Brexit pessimism. Moving on, traders await the US House votes on the COVID-19 Relief Bill for near-term direction.
The US toppled China with more than 81,000 virus cases whereas the BBC cites the highest single-day increase in the UK’s death toll, by 103 to 578, on Thursday.
Elsewhere, the Guardian cited deep differences between the UK and EU over the Brexit talks that are already in the deep freeze for now while the Mirror said that the UK won't take part in EU drive for ventilators because of Brexit.
The Bank of England (BOE) failed to offer any fireworks due to a lack of ammunition while disappointing UK Retail Sales, to 0.0% from 0.8% YoY forecast, also couldn’t recall the bears.
On the other hand, the US dollar registered broad weakness as the markets’ weighed multiple concerns ranging from downbeat employment data to the outbreak in the US.
The risk-tone remains mildly positive with the US 10-year treasury yields being above 0.80% and most Asian stocks flashing the gains.
While the uncertainty over the House voting on the key bill is likely to keep the pair on the front-foot a likely passage could trigger the pair’s pullback on the news. As a result, traders will keep eyes on the macros for fresh direction while the US Michigan Consumer Sentiment Index could offer intermediate direction.
Technical analysis
Only if the pair slips below 10-day SMA level of 1.1870, it can recall the sellers else 1.2365, comprising 21-day SMA, flashes on the bull’s radar.