GBP/USD snaps two-day run-up, slips below 1.2600, ahead of UK PMI
- GBP/USD slips from 13-day high amid broad US dollar pullback.
- UK PM Johnson confident of being past the peak, will give guidelines on easing lockdown restrictions next week.
- British diplomats reject EU’s another request for an embassy in Belfast, still hope for a deal soon.
- US dollar pulls back amid fresh US-China trade tussle.
GBP/USD takes a U-turn from 13-day top to 1.2565, down 0.25% on a day, while heading into the London open on Friday. In doing so, the Cable fails to defy the broad US dollar pullback amid renewed fears of the US-China trade war, as well as Brexit/coronavirus (COVID-19) worries. Though, cautious sentiment ahead of UK Manufacturing PMI checks the pair’s moves.
The US dollar registers a comeback following the market’s rush to risk-safety amid the growing concerns of another US-China trade-war season, backed by the recent comments from US President Donald Trump.
The UK PM Boris Johnson struck an upbeat tone during his first daily coronavirus briefings after returning to the office. The Tory leader said to be past the peak of the pandemic while sharing no key guidelines about the economy’s re-open.
It’s worth mentioning that data from John Hopkins University suggest the UK as having the second-highest death toll in Europe, beyond 26,700 with the latest addition of 674, whereas confirm cases grow past-172,000.
Elsewhere, Brexit talks between the EU and the UK diplomats didn’t go well on Reuters as Britain rejected another request from the bloc to open an official representation in Belfast for customs officials to monitor shipments between Great Britain and Northern Ireland, as per The Guardian. Even so, Tories are hopeful of cracking a deal with the EU.
Furthermore, the UK’s trade body Make UK, said that the British Factory Output is at the risk of halving due to the virus, per Reuters.
Moving on, updates concerning the US-China trade deal, as well as virus/Brexit news, can keep the Cable traders busy while the first revision of UK’s April month Manufacturing PMI, expected 32.8 versus 32.9 initial forecast, will occupy the British calendar. For the US data, Manufacturing PMIs from the ISM and Markit will be important to watch.
Technical analysis
The pair currently seems to decline towards 61.8% Fibonacci retracement of March month fall, near 1.2515, ahead of revisiting 1.2500 round-figure. Meanwhile, a daily closing beyond a 200-day SMA level of 1.2655 becomes necessary for the bulls to keep the helm and aim for February month low surrounding 1.2725.