GBP/USD bulls await Bailey's turn at Jackson Hole above 1.3200
- GBP/USD defies the previous day’s pullback from yearly high of 1.3284, stays bid near intraday top.
- Brexit woes, surge in virus cases at home mostly ignored as US dollar trims Thursday’s gains.
- BOE’s Bailey to be the second key central banker at Jackson Hole after Fed’s Powell played well.
GBP/USD refreshes the intraday high to 1.3242, up 0.29%, while heading into the London open on Friday. The cable, alike most majors, refreshed the yearly high on Thursday before declining to 1.3161, which in snapped the two-day winning streak. The broad US dollar rally, after comments from Fed Chair, dragged the quote downward the previous day. Though, the greenback’s latest declines favor the pair bulls ahead of BOE Governor Andrew Bailey’s speech at the Jackson Hole Symposium.
While flashing the third positive day in prior four, the GBP/USD prices also pay a little heed to the Brexit woes signaled by The Times. The news said, “Downing Street has been warned that Boris Johnson has less than two weeks to save post-Brexit trade and security talks, according to senior European Union (EU) sources.” It’s worth mentioning that the final scheduled round of post-Brexit trade negotiations between the EU and the UK have already failed but diplomats are likely to meet next week. Further to note is Germany’s removal of Brexit talks as agenda from next week’s key talks among the EU ambassadors.
Elsewhere, the noise surrounding insect repellent ingredient protecting against the coronavirus (COVID-19) and 21-day immunity plan portrayed a mild optimism at home. The mood ignores the highest daily COVID-19 cases while making 1,522 numbers for Thursday.
On the other hand, US President Donald Trump said to end reliance on China “once and for all”. Further, the magical words of Fed Chair Powell, concerning Average Inflation Targeting (AIT), seem to fade the allure as markets start reading between the lines and spot economic fears.
Even so, the risk-tone sentiment remains upbeat with S&P 500 Futures refreshing record high above 3,500 and the US 10-year Treasury yields refreshing 2.5-year high.
Looking forward, a lack of UK data will be compensated by the second-tier US economics ahead of Bailey’s speech at 13:05 GMT. While there prevails a confusion relating to the title of the speech, traders look for hints to Brexit and furlough scheme as the “Old Lady” recently acted. However, any downbeat comments from the BOE boss will be enough to drag the GBP/USD back from 1.3284, the same high as flashed on December 31, 2019.
Technical analysis
Although the pair’s ability to stay past-1.3200 keeps the buyers hopeful, market players will remain cautious unless it breaks above the 1.3300 threshold.