GBP/USD Analysis: Brexit uncertainty hurt the Pound

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2564

Chances that a Brexit deal could be reached before the EU Summit decreased.
UK employment sector seen retaining its healthy stance in the three months to August.
GBP/USD retreated, but the short-term picture indicates that bulls retain the lead.

The GBP/USD pair is finishing the day lower at around 1.2560, having fallen to a daily low of 1.2515. Brexit-related headlines kept weighing on Sterling, following weekend comments from UK PM Johnson, who stated that there’s still a long way to go in regards of a deal with the EU. This Monday reports suggested that EU representatives fear that Johnson won’t be able to pass Brexit in Parliament, while Ireland’s Foreign Minister Simon Coveney said that, while a deal is possible, though issues remain. Talks were making slow progress, according to politicians from both sides. Meanwhile, the queen offered a speech to Parliament, in which she stated that the government’s priority is to secure the UK’s departure from the EU on October 31^st.

The UK will release this Tuesday its latest employment data. The ILO Unemployment Rate is seen stable at 3.8%, while the September Claimant Count Change is expected at 27.9K vs the previous 28.2K. Average hourly earnings are seen ticking modestly lower, although within healthy levels.

GBP/USD short-term technical outlook

The GBP/USD pair is down roughly 150 pips from the high set last week at 1.2706, retaining the positive stance in the 4 hours chart, as the pair continues developing above all of its moving averages, with the 20 SMA heading firmly higher above the larger ones. Technical indicators barely retreated from extreme overbought levels before turning flat, indicating limited selling interest. Nevertheless, the decline could continue on the back of more discouraging Brexit-related news.

Support levels: 1.2515 1.2480 1.2440

Resistance levels: 1.2600 1.2630 1.2675

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.