GBP/USD Forecast: Brexit, BOE and new restrictive measures in the UK
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UNLOCK OFFERGBP/USD Current price: 1.2735
- BOE’s Bailey dismissed the use of negative rates, giving the Pound short-lived support.
- UK PM Boris Johnson announced new restrictive measures but avoided a full lockdown.
- GBP/USD has bounced from a multi-week low of 1.2709, but bears retain control.
The GBP/USD pair edged sharply lower for a third consecutive day, trading as low as 1.2709, its lowest level since last July. The pair seesawed between gains and losses, hitting an intraday high of 1.2866 after BOE’s Governor Bailey said that mention of negative rates does not imply their use. Additionally, EU’s Barnier headed to London for informal trade talks, as Brexit negotiations are reportedly going “a bit” better. The pair started retreating after UK PM Johnson announced new coronavirus-related restrictions, which could last for up to six months. However, he said that this was “by no means a return to the full lockdown of March,” as the aim was to cause the minimum damage to lives and livelihood.
The UK published the CBI Industrial Trends Survey on Orders, which fell in September to -48% from -44%, worse than anticipated. This Wednesday, Markit will publish the September preliminary estimate of the UK Manufacturing PMI, foreseen at 54.3 from 55.2 previously, and the services index for the same month, expected at 56 from 58.8 in August.
GBP/USD short-term technical outlook
The GBP/USD pair is trading around 1.2730, maintaining the bearish stance as the US session comes to an end. In the 4-hour chart, the pair is developing below all of its moving averages, which accelerate south, indicating strong selling interest. Technical indicators, in the meantime, have stabilized near oversold readings, with no signs of downward exhaustion. A break below the mentioned daily low exposes the 1.2660 price zone, where the pair has the next strong static support area.
Support levels: 1.2710 1.2665 1.2620
Resistance levels: 1.2765 1.2820 1.2870
GBP/USD Current price: 1.2735
- BOE’s Bailey dismissed the use of negative rates, giving the Pound short-lived support.
- UK PM Boris Johnson announced new restrictive measures but avoided a full lockdown.
- GBP/USD has bounced from a multi-week low of 1.2709, but bears retain control.
The GBP/USD pair edged sharply lower for a third consecutive day, trading as low as 1.2709, its lowest level since last July. The pair seesawed between gains and losses, hitting an intraday high of 1.2866 after BOE’s Governor Bailey said that mention of negative rates does not imply their use. Additionally, EU’s Barnier headed to London for informal trade talks, as Brexit negotiations are reportedly going “a bit” better. The pair started retreating after UK PM Johnson announced new coronavirus-related restrictions, which could last for up to six months. However, he said that this was “by no means a return to the full lockdown of March,” as the aim was to cause the minimum damage to lives and livelihood.
The UK published the CBI Industrial Trends Survey on Orders, which fell in September to -48% from -44%, worse than anticipated. This Wednesday, Markit will publish the September preliminary estimate of the UK Manufacturing PMI, foreseen at 54.3 from 55.2 previously, and the services index for the same month, expected at 56 from 58.8 in August.
GBP/USD short-term technical outlook
The GBP/USD pair is trading around 1.2730, maintaining the bearish stance as the US session comes to an end. In the 4-hour chart, the pair is developing below all of its moving averages, which accelerate south, indicating strong selling interest. Technical indicators, in the meantime, have stabilized near oversold readings, with no signs of downward exhaustion. A break below the mentioned daily low exposes the 1.2660 price zone, where the pair has the next strong static support area.
Support levels: 1.2710 1.2665 1.2620
Resistance levels: 1.2765 1.2820 1.2870
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