GBP/USD off 3-week-old support-line ahead of UK Manufacturing PMI, Parliament reopen

• GBP/USD takes a U-turn from near-term support as investors await fresh data/political clues.
• The US markets’ are closed for the day while the UK Manufacturing PMI will decorate the British economic calendar.
• Boris Johnson threatens to sack Tory rebels, Michael Gove increases odds of no-deal Brexit ahead of Tuesday’s Parliament reopen.

Despite strong US Dollar (USD) and political pessimism surrounding the UK, GBP/USD recovers from a three-week-old support-line as it takes the bids to 1.2160 ahead of the London open on Monday.

The reason could be markets’ greenback profit-booking on the day of the Labor Day Holiday at the United States (US) while anticipated improvement in the UK Markit Manufacturing Purchasing Managers’ Index (PMI), from 48.00 to 48.40, could be considered as an additional catalyst for the bounce.

Political plays are getting murkier at Britain as Tory whips are warned not to go against the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson’s agenda of proroguing the parliament. With this, Boris haters got an additional reason to protest against the no-deal Brexit as well as PM Johnson’s ability to prorogue the parliament. However, comments from the Chancellor of the Duchy of Lancaster, Michael Gove, who oversees the Brexit, increases the odds for no-deal Brexit by refusing to rule out any law that can stop no-deal departure.

Additionally, cross-party members of the Parliaments (MPs), coupled with some of the Tory rebels, are united to put forward a motion challenging the UK PM’s prorogation of the Parliament on Tuesday while the opposition Labour party leader Jeremy Corbyn still gathers support for a no-confidence vote to topple the PM Johnson and become interim leader of the UK.

While the UK Parliaments will be on a marathon week, the month-start PMIs will add liquidity into otherwise less active British Pound (GBP).

Technical Analysis

An upward sloping trend-line since August 13, at 1.2130, acts as immediate support ahead of highlighting 1.2100 and 1.2015 key rest-points. On the upside, the 21-day exponential moving average (EMA) level of 1.2200 holds the upside momentum capped.