GBP/USD: Fears of EU barriers trouble buyers amid year-end choppy session
- GBP/USD stays mildly positive beneath familiar upside territory.
- Irish bridge gets acceptance if the UK is paying for it.
- EU’s threat of using barriers to push the UK towards its terms seems to weigh on the Brexit optimism, more on that is awaited for fresh impulse.
GBP/USD struggles around 1.3000 round-figure while heading into the London open on Friday. In doing so, the pair struggles to extend its recovery since Tuesday.
While optimism surrounding the Brexit, after the victory of the ruling Conservatives, seems to please the buyers, the latest upside has been capped by the UK Times article that signals the European Union’s (EU) readiness to take tough measures to push Britain towards its rules. The story mentions that Brussels is ready to go hard on the UK by cutting access to data flows vital to British commerce as well as by limiting the future of financial services.
Read: Brussels threat to block City trade unless UK agrees to Europe’s rules - Times
Even so, reports that the UK will match pre-crisis level wages during early 2020 are something that helps the present strength of the quote.
Earlier, the cable benefited from the Independent’s news that the Irish PM Leo Varadkar is in support of thinking about the UK PM Boris Johnson’s proposal idea of building a bridge between Northern Ireland and Scotland if Britain pays for it.
On the other hand, market performance remained choppy amid the year-end holiday mood. However, nearness to the US-China phase-one signing seems to have helped the risk tone off-late. With this, the US 10-year treasury yields seesaw around 1.90% while S&P 500 Futures and Asian stocks are mildly positive.
Given the lack of major data/events up for publishing during the rest of the day, investors will keep eyes on the trade/political news for fresh impulse.
Technical Analysis
Unless providing a sustained daily closing beyond 21-day Exponential Moving Average (EMA) level around 1.3035, prices are less likely to avoid visiting 50-day EMA, around 1.2930 now.