GBPUSD eases back below 1.3850 as US dollar finds footing
- GBP/USD is edging below the 1.3850 mark as the US dollar index finds a bid tone.
- Brexit continues to weigh on trade, as the UK extends Northern Ireland’s grace periods.
- The focus remains on the USD price-action and Brexit news amid a light data docket.
GBP/USD is trading close to 1.3850 again on broad US dollar index (DXY) weakness. The currency pair could come under pressure if DXY finds bids coming around the 92.10 mark.
The Asian markets remain upbeat except Australia’s ASX 200, which is down 0.14% at 7,517. Meanwhile, the S&P 500 futures are up 0.13% at 4,541 and US 10-year yields are trading higher at 1.343%.
The US dollar index is shrugging off gains despite firmer US Treasury yields, as risk-on market sentiment still prevails after a big miss on US NFP on Friday.
Brexit woes continue to weigh on the cable as the UK prepares to extend Northern Ireland’s grace periods. It plans to extend post-Brexit grace periods on some goods import to Northern Ireland.
The move is expected to buy more time and help resolve the Northern Ireland issue between the UK and the EU. Ireland remains a key player in post-Brexit trade talks and it expects Britain to lead towards a permanent solution.
With a relatively light week for the cable on the macro front, the pair would be taking its cues from the US dollar index, Brexit, and the prevailing COVID-19 situation in the country.
Technical levels
GBP/USD is trading just below 1.3850 with immediate support seen around the 1.3820 mark, the September 06 low.
The pair is facing immediate resistance around 1.3890, the September 3 high. A drop below 1.3820 will open the door towards the 1.3780 mark.