- GBP/USD prints first daily negative in three, bears attack intraday low with mild losses at the latest.
- UK-EU approaches fisheries agreement on 2022 stocks, DUP to push Brexit Minister Truss towards Article 16.
- UK’s covid infections jump past 100K for the first time on record, optimism over virus pills, vaccines also fade.
- US Durable Goods Orders, PCE Inflation to decorate calendar, risk catalysts are critical.
GBP/USD consolidates recent gains around the weekly top, down 0.10% intraday around 1.3350 during early Thursday.
In doing so, the cable pair portrays the market’s indecision amid mixed concerns over Brexit and Omicron. The same challenges the quote’s previous two-day uptrend based on optimism concerning a cure to the South African covid variant, dubbed as Omicron, as well as positive updates over US President Joe Biden's Build Back Better (BBB) stimulus plan.
Starting with the Brexit, the Independent came out with a story saying, “Britain has agreed new fisheries deal with the European Union over how to divide up shared stocks in the year ahead.” The details, however, also cite the agreement as, “a separate affair from the row over fishing licenses which has sparked threats of a trade war and prompted French trawlers to blockade the Channel.”
Elsewhere, the Daily Telegraph mentioned that Democratic Unionist Party (DUP) is up for pushing Brexit Minister Liz truss towards a bumpy road. “Unionists want Article 16 of the Northern Ireland Protocol triggered before Stormont elections in May,” the news said.
On a different page, the UK continues to witness downbeat covid numbers with the latest figures of 106,122 daily infections per the BBC. The news also mentioned the figure as, “The eight highest daily case figures since the pandemic began have all come since 15 December.”
It’s worth noting that the White House fears over the availability of Pfizer’s pill to battle the Omicron that recently got the US Food and Drug Administration (FDA) approval challenge the earlier risk-on mood and weigh on the GBP/USD prices. On the same line is China’s biggest-ever lockdown, of around 13 million residents in Xi’an as stated by the Wall Street Journal (WSJ).
However, hopes of the US stimulus and firmer data challenge the pair buyers. White House spokeswoman Jen Psaki said, per Reuters, “We believe that Senator Manchin has been engaging with us over the course of time and months in good faith."
Talking about the data, the US Q3 GDP rose past the 2.1% forecast to 2.3% whereas the CB Consumer Confidence for December came in better than upwardly revised 111.9 prior to 115.8. On the contrary, the UK Q3 GDP eased below 1.3% to 1.1%.
Against this backdrop, the S&P 500 Futures struggle to copy the Wall Street’s gains while the US 10-year Treasury yields seesaw around 1.45% after declining for the first time in three days on Wednesday.
Moving on, GBP/USD traders will pay attention to the US PCE inflation and Durable Goods Orders for November for fresh impulse while keeping their eyes on the Brexit and Omicron news.
Technical analysis
A clear upside break of the five-week-old descending trend line, at 1.3335 by the press time, favors GBP/USD bulls to aim for a fresh monthly high, currently around 1.3275.
