Forex Market: GBP/USD holds ground above 1.2700 as markets await fresh news over Brexit negotiations

GBP/USD maintained ground above the 1.2700 mark on Thursday, but traded within a relatively tight range as market players were expecting fresh news over any developments regarding EU-UK Brexit trade negotiations.

Earlier this week reports emerged stating that the United Kingdom had abandoned hopes to sign a post-Brexit trade deal with the European Union, while the UK government’s working assumption was the country would trade with the bloc on World Trade Organisation terms.

Therefore, markets should “watch the tone of the statements coming out of today’s final meetings to see if they are of a conciliatory or confrontational nature,” according to Marshal Gittler, head of investment research at BDSwiss Group.

As of 10:51 GMT on Thursday GBP/USD was edging down 0.13% to trade at 1.2717, after touching an intraday high of 1.2754, or a level not seen since July 21st (1.2768), a six-week high. The major pair has risen 1.25% so far this week, following a 0.43% drop in the preceding week.

On today’s economic calendar, at 11:00 GMT Bank of England Monetary Policy Committee member Jonathan Haskel is scheduled to speak during “From Lockdown to recovery – the economic effects of COVID-19” webinar hosted by Imperial College Business School.

At 12:30 GMT the US Labor Department will report on jobless claims. The number of people in the country, who filed for unemployment assistance for the first time during the business week ended July 17th, probably stood at 1,300,000, according to market expectations, or the same number of claims as reported in the preceding week.

Data for the week ended July 10th brought the total number of claims reported since March 21st to 51.3 million, as several US states were forced to scale back or postpone reopening plans.

Bond Yield Spread

The spread between 2-year US and 2-year UK bond yields, which reflects the flow of funds in a short term, equaled 26.6 basis points (0.266%) as of 10:15 GMT on Thursday, down from 27.4 basis points on July 22nd.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – 1.2707
R1 – 1.2770
R2 – 1.2807
R3 – 1.2869
R4 – 1.2932

S1 – 1.2670
S2 – 1.2608
S3 – 1.2571
S4 – 1.2534 is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

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