GBP/USD Outlook: Brexit uncertainty continues to weigh and offset positive impact
|GBPUSD
Cable accelerated lower in early European trading on Thursday, maintaining negative near-term tone and pressuring previous day’s spike low at 1.3146.
Brexit uncertainty continues to weigh and offset positive impact from Wednesday’s surprise from Fed, which presented ultra-dovish stance, signaling no rate hike in 2019 and lowering GDP forecast for this year.
Pound’s advance after announcement that sent US dollar lower was short-lived, keeping in play bearish near-term bias.
Fresh weakness probes again below converged 10/20SMA’s (1.3200/1.3189) following Wednesday’s false break.
Brexit drama remains key driver, as concerns about no-deal Brexit are back to the table, while PM May’s request for short Brexit extension faced obstacles from some EU members, which said that extension is too short to be able to make some substantial changes in existing plan
Bears eye supports at 1.3120/02 (Fibo 61.8% of 1.2960/1.3381 / 30SMA), but negative scenario requires confirmation on daily close below 10/20SMA’s).
Solid UK retail sales (retail sales y/y Feb 4.0% vs 3.1% f/c / core Feb 3.8% vs 3.3%) boosted pound and pause bears, however, recovery might be limited on overall bearish sentiment.
Release of BoE MPC’s last policy meeting are also in focus, with expectations that policymakers voted 9-0 to keep rate unchanged.
Res: 1.3200; 1.3227; 1.3272; 1.3310
Sup: 1.3146; 1.3120; 1.3102; 1.3059
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