The overnight data on China’s June trade balance showed a higher surplus (as a result of weaker imports), but the report did not shake the market. It is easy to discuss whether, when President Trump receives a note with this data, he will not be led to an acute tweet in which he will accuse China of unfair exchange of goods with the US. For now, however, Trump visits Great Britain and «mixes» London’s relations with Brussels. In an interview with The Sun, he said that Prime Minister Mayor ignored his advice and headed for the soft Brexit, which, however, reduces the chances of lucrative trade agreements with the US. He also noted that he highly values Boris Johnson, who would prove himself as a great leader. These words scratch the wounds of the shock caused by the government’s shuffles earlier this week and GBP is losing ground. Yesterday, the publication of the so-called White Document, in which the new Brexit plan was laid out, did not make the difference at all. First of all, the approach to financial services is criticized, where the proposals are strict with a view to the grace of Brussels. It is difficult to be a strong promoter of the pound now, even if in the longer horizon the materialization of the soft Brexit will pull the GBP strongly up.
Let’s now take a look at the GBP/USD technical picture at the H4 time frame. The market has broken below the 61% Fibo retracement nad currently is heading lower towards the intraday support at the level of 1.3094. This level is just slightly above the technical support zone at 1.3067 — 1.3049. Please notice the oversold market conditions and weak momentum, which might result in a temporary pull-back higer towards the level of 1.3191 soon.