GBP/USD recovers ahead of voting on UK PM Johnson’s WAB

• GBP/USD bounces off 12-day low amid optimism surrounding the Brexit.
• The UK government has already said pass Brexit deal legislation through Commons by January 09.
• The UK/US economic calendar will also direct near-term trade direction.

The GBP/USD pair benefits from the Brexit optimism while taking the bids to 1.3020 ahead of the London open on Friday. The cable traders turn confident of the faster/smooth Brexit ahead of the House of Commons’ voting on the UK PM’s Brexit bill.

Reuters came out with the news, quoting the UK government, which says the Brexit deal legislations will be through the Commons by January 09. The three-day deadline was previous rejected by the Members of the Parliaments (MPs) but is not likely to happen this time considering the Tory leadership after the recent general election.

On Thursday, downbeat UK Retail Sales and no major positive news from the Queen’s speech or Bank of England (BOE) monetary policy meeting, seemed to have weighed on cable. However, the broad weakness of the US dollar (USD), mainly due to disappointing data at home, limited the losses.

While the EU (Withdrawal Agreement) Bill (WAB) will enable the UK to leave the European Union on January 31 while also setting the stage for no transition period beyond December 2020. Further, as per the BBC, the bill will also enable more British judges to depart from previous rulings of the EU's top court.

The results of the voting will be out by around 15:00 GMT on Friday. Investors may watch over the final reading of the UK’s third-quarter (Q3) Gross Domestic Product (GDP) for intermediate moves. The forecast suggests no change in the GDP figures on QoQ and YoY basis that are 0.3% and 1.0% respectively.

On the other hand, the US has some additional details like consumer spending and sentiment data over the Q3 GDP will increase the burden on the market watchers. “The key core PCE price index probably rose just 0.1% in November, lowering the 12-month change to 1.5% from 1.6% in October. Base effects should help boost the 12-month change again in Q1, but for now, the pace is moving away from the Fed's 2% goal. We expect the headline PCE price index to be up 0.2% m/m, lifting the 12-month change to a still-low 1.4% from 1.3%. Separately, we anticipate personal spending to advance a firm 0.4% in November, marking its strongest monthly increase in four months. Despite that, the November print should continue to indicate household spending is moderating in Q4. Lastly, we forecast UMich's consumer sentiment to have improved modestly to 99.5 from its preliminary value at 99.2 for December,” says TD Securities.

Technical Analysis

November month high near 1.2985 seems immediate support ahead of 1.2830 while an upside clearance of 1.3100 will trigger fresh buying.