- GBP/USD continues to hold on to previous day gains
- Buyers remain positive despite Brexit bill defeats
- December employment data holds the key for the coming trend
Sterling and the GBP/USD pair have held on to gains in Monday trading as we move into the week. While the pairs still displays bearish signs under technical analysis, it is holding up better than expected given the relatively poor data and uncertainty surrounding the market in recent weeks. These movements suggest that the pair may have weathered its first real test since the conservative party under PM Boris Johnson romped to victory in the last general election.
Defeat in the House of Lords does little to shake GBP movement
Continuing positive movements in Tuesday’s forex market for the Pound have been even more impressive considering the fact that the ruling Tory party have endured their first major defeat in the House of Lords. This defeat came as the upper house in the UK knocked back three proposed amendments to the UK Brexit withdrawal agreement bill. These three alterations are mainly aimed at setting even more autonomy and distance between Britain and the EU in the post-Brexit period, specifically with EU Court of Justice Rulings. Another related to the provision of an official document proving proof of residence and the right to work in the UK to EU nationals post Brexit.
Positivity prevails despite bill defeat
With this defeat, the bills will now return to the House of Commons for revision prior to possible re-proposal. While many analysts may have expected the GBP to weaken on this rejection, it has actually held strongly and gained slightly on the news. The market certainly appear to have gathered a different signal from the result than was expected.
This positivity could also point to optimism within the market at the fact that talks on an EU-UK trade deal seem to have shown positive signs of progress lately. Another slight contributing factor could be the beginning of the US impeachment trial which has gotten underway. This may certainly play a role in slightly weakening the USD side of the pair in the coming days and weeks depending on the news.
Market awaits UK job data release
A final factor which may have a strong influence on the GBP/USD forex market this week is the release of UK employment data that is due later today. The expectation is that these figures will see British unemployment remains at a steady 3.8% in the three months leading up to November, that average hourly earnings will increase by 3.1% within this period, and that the number of those claiming unemployment related benefit will be 24,500.
Anything outside of these numbers could either see the market further solidify, or chip away the gains of recent days depending on how forex traders react to the news.