GBP/USD bears catch a breath ahead of UK PM Johnson’s emergency meeting
- GBP/USD trades with modest losses.
- Doubts upon the further EU-UK talks remain elevated amid coronavirus fears.
- Cable traders await further measures by the Tory government after Wednesday’s heavy stimulus.
GBP/USD registers modest losses, currently trading around 1.2815, while heading into the London open on Thursday. The pair fails to cheer the broad US dollar weakness after US President Donald Trump’s stimulus. The reason could be the UK PM Boris Johnson’s further announcements to tackle the coronavirus (COVID-19).
Having fired a double-barrel attack on the deadly virus, the Tory leader called for an emergency meeting to escalate the efforts to counter the outbreak. The meeting, which will be held around 13:15 GMT as per Reuters, could convey the decision move to the so-called "delay phase" from "contain".
The reason could be traced from The Guardian’s news that raised doubts over the further EU-UK Brexit talks, scheduled for taking place during the next week in London, as confirmed by the Duchy of Lancaster Michael Gove. In doing so, the pair paid a little heed to the UK’s RICS Housing Price Balance that rallied to the four-year high.
On the other hand, the US President Donald Trump’s failure to provide a major push to the spending got higher attention. Additionally weighing on the risk-tone could be the fears spread by the CNBC that the US cases could rise to millions.
The British PM Johnson is less expected to announce any major stimulus after the BOE joined the budgetary push to defeat the virus the previous day. However, the Tory leader is famous for providing surprises and hence traders should wait for the actual announcements.
On the economic calendar, the US PPI and Jobless Claims can entertain the momentum traders. “The overall PPI was likely held down by the weakening in energy prices, similar to the pattern in the CPI (TD -0.2%). The core measures were probably fairly weak as well following above-trend readings in January,” said TD Securities.
Technical Analysis
100-day SMA near 1.3000 acts as the nearby resistance while 50% Fibonacci retracement of the pair’s September-December 2019 upside and 200-day SMA, close to 1.2735 and 1.2710 respectively, can please the sellers during the further declines.