- Brexit updates keenly followed for cues regarding trading direction.
- US data eyed as 200 DMA in play.
The GBP/USD bears couldn’t push the pair much below the 200-day moving average and faced resistance as the UK finance minister; Rishi Sunak in an emergency statement to Parliament discussed plans to save jobs and businesses from the economic impact of the coronavirus. The pandemic has brought back financial worries through a potential second-wave of infections recently.
The FM’s plan involves the government subsidizing the pay of employees who have to work less due to the lack of demand. The scheme will cover the two-third of the lost wages for the employees.
The dollar demand continued as the pandemic fears, and the associated economic troubles rose all over the world. The GBP/USD was also held back by the uncertainties surrounding a deal before Britain’s exit from the EU.
Nevertheless, the USD profit-taking was visible, after the recent rally to two-month highs. The action surrounded the release of the US Initial Weekly Jobless Claims which was at 870K against an expected 843K and 866K previous. Later, a rally in the equity markets also helped the risk-on mood to continue dollar selling.
The sentiments were helped by the fresh hopes of the US Congress breaking the impasse over the stimulus bill details. Reports indicate a two trillion dollar stimulus bill is being prepared by the democrats and the House Speaker Nancy Pelosi set to resume talks with US Treasury Secretary Steven Mnuchin.
The GBP/USD traded above mid-1.2700s during today’s Asian session, but couldn’t attract much follow-through buying as the market participants await Brexit signals before putting fresh long-bets. Later, US Durable Goods Orders during the North American session could produce some meaningful action in the pair.