GBP/USD stays under pressure ahead of the UK Supreme Court ruling
- GBP/USD carries weakness below 10-day SMA.
- Brexit pessimism prevails as the EU-UK leaders convey “no breakthrough” from UNGA.
- British Supreme Court will decide whether the UK PM acted unlawfully while proroguing the Parliament.
With the absence of any Brexit-positive headlines, the GBP/USD pair remains on the back foot while trading near 1.2430 ahead of the key London open on Tuesday.
Despite handling over the “non-papers” for the Irish backstop alternatives, the United Kingdom (UK) is still far from pleasing the European Union (EU) leaders as the recent Brexit discussions between European Commission President Jean Claude Juncker and the UK Prime Minister (PM) Boris Johnson, at the United Nations General Assembly (UNGA), failed to deliver any breakthrough.
The Cable sellers were also pleased to know the Opposition Labour party leader Jeremy Corbyn’s victory at the party’s annual conference. Mr. Corbyn recently risked his position by proposing a motion that will not oppose the Brexit.
Elsewhere, the UK PM is also under scrutiny over using public money toward the cause concerning an American businesswoman while he was the London Mayor. Though, PM Johnson has clearly said that “everything was done with complete propriety”.
On the other hand, the US Dollar (USD) recently benefited from the positive activity numbers and dovish comments by the European Central Bank (ECB) President Mario Draghi. Recently extending the greenback run-up is the US-China trade positive stories.
Investors will have all eyes on the UK Supreme Court Ruling, at 09:30 GMT, which will decide whether the UK PM acted unlawfully, by misguiding the Queen, when he recently prorogued the Parliament till October 14.
The Supreme Court will first decide whether it is capable of taking a decision or not, if yes it will provide the ruling. If the Tory leader is found guilty, chances of the British Parliaments to resume increases, which in turn can trigger short-term upside of the Cable. However, the decision won’t stop Mr. Johnson from proroguing the Parliament again, which he has already signaled as per The Sun. As a result, an anti-Johnson decision from the UK Supreme Court could tame no-deal Brexit fears for short-term and hence carry less importance for a broader view.
On the data front, the US Consumer Confidence, Richmond Fed Manufacturing Index and Housing market figures could entertain traders.
Technical Analysis
Not only 10-day simple moving average (SMA) level of 1.2442, recent high close to 1.2583 also offer strong upside barrier to the pair, which in turn increases the importance of 1.2385/80 horizontal support and 50-DMA level around 1.2280/75.