GBP/USD bounces off 10-day EMA as US, Malaysia ready for trade deal with UK, Brexit looms

• GBP/USD recovers as the UK’s new government is appreciated by the US, Malaysia.
• The EU, Ireland reiterate unpreparedness to renegotiate the Brexit deal.
• PM Johnson’s visit to the German, France will be the key.

Although the EU and Ireland rejected the UK’s proposal to alter Irish backstop agreement, the GBP/USD pair recovers to 1.2133 while heading into the London open on Tuesday.

During the early Asian session, the UK Prime Minister (PM) Boris Johnson’s four-page letter concerning alternative way for Irish backstop and scope for Brexit deal renegotiation was firmly turned down by the EU, as per The Guardian. The report also mentions that the PM Johnson spent a few hours talking with his Irish counterpart to persuade him for the deal but failed to get any positive response.

On the other hand, the US President Donald Trump and Malaysian Prime Minister Mahathir Bin Mohamad showed upbeat response towards their future trade relations with the UK after Brexit.

Market sentiment remains mostly unchanged as traders await fresh clues from this week’s key events while same old stories concerning trade, Brexit and monetary policy easing are gaining less audience nowadays.

While the economic calendar is likely to portray another dull day, investors will brace for the UK PM’s two-day visit to Germany and France while the US Federal Reserve policymakers’ appearance at the Jackson Hole Symposium will also provide fresh impulse.

Technical Analysis

Buyers will keep an eye over 1.2210/15 area including August 06 high and July 29 low to aim for 1.2250 whereas 10-day exponential moving average (EMA) level of 1.2120 can drag prices to eight-day-old rising support-line at 1.2085 now.