GBP/USD on the bids near 10-day high amid lack of catalysts

• The GBP/USD pair benefits from the US Dollar (USD) weakness while political/Brexit uncertainty at home gains little attention.
• UK politics favor Boris Johnson as the frontrunner for the PM’s post despite latest criticism.
• Trade/political headlines, US manufacturing gauge to grab the attention amid fewer directives.

Despite being short on catalysts to direct near-term moves, GBP/USD manages to remain strong around 10-day high as it takes the bids to 1.2570 heading into the London open on Monday.

Markets remain sidelined ahead of the key employment data scheduled for release during the week. Risk tone remains light with 10-year US treasury yields staying strong at 2.124% by the press time.

The greenback weakness takes its clues from recently dovish Fedspeak that gave rise to expectations of easy money from the US central bank on the back of future rate cuts. Adding to the USD declines could be the US-China trade deadlock that holds even after upbeat announcements after G20.

On the other hand, the British political fraternity continues to favor Boris Johnson in the race of the Prime Minister (PM) even if he remains ready to trigger hard Brexit. A one week’s time is still left before the Tory leadership contest gets over and both the candidates keep selling their promises from which Mr. Johnson has an upper hand. As per The Times, PM hopeful Johnson is likely to clinch a trade deal with the US as his first step after being the UK leader.

While political developments surrounding Britain can keep offering background music to market momentum, the US NY Empire State Manufacturing Index data for June coupled with trade/political news should be watched for fresh impulse. The US manufacturing gauge is expected to recover -8.6 previous contraction with +0.5 mark.

Technical Analysis

Buyers need to conquer 1.2579/82 resistance confluence, including 100-bar exponential moving average (4H 100EMA) and a 20-day descending trend-line, in order to aim for 1.2590 and 50% Fibonacci retracement of late-June to early-July downpour around 1.2612. Alternatively, a downside break of 1.2540 highlights 23.6% Fibonacci retracement level of 1.2520 and early-month extremes close to 1.2480/77.