GBP/USD Forecast: Corbyn cuts cable's climb, downtrend resistance works
|- GBP/USD falls after talks between the government and the opposition stalled.
- The move comes despite upbeat data and a positive market mood.
- Downtrend resistance proved its strength.
GBP/USD is down to around 1.3050, hitting the lowest levels in a week. Labour leader Jeremy Corbyn said that there is no agreement on a customs union between the government and the opposition. He said that the government is not shifting on its red lines and blames hardliners in the Conservative Party for wanting a deregulated low-tax society that will deal with Trump.
The news sent the pound down despite upbeat data. UK unemployment remains at a record low of 3.9%, and wage growth holds its ground at 3.5% YoY. In addition, stock markets are positive, and the risk-on mood should have helped Sterling surpass the US Dollar. Nevertheless, Brexit dominates, even after the long delay.
Further responses to the stalled talks will likely dominate the next moves.
GBP/USD Technical Analysis
Below 1.3050, cable has support at 1.3030 which was a low point last week. 1.2985 was the trough in April and 1.2960 was the low point in March.
Resistance awaits at this week's highs at 1.3120, followed by the April high of 1.3200. 1.3270 and 1.3315 are next.
Another top-tier economic indicator awaits the pound on Wednesday.
See UK inflation preview: Can a second positive piece of data lift GBP/USD?
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.