GBP/USD analysis: Brexit´s trigger to take center stage

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2472

The GBP/USD pair fell on Friday, but advanced for a second week in-a-row, settling at 1.2470. The Pound got a boost last Tuesday, following the release of higher-than-expected UK inflation figures, exacerbated by broad dollar's weakness ever since the week started. Nevertheless the pair was unable to advance to retake the 1.2500 level, despite multiple intraday attempts to break higher. Attention this week will center in PM May's announcement of the beginning of Brexit, as the UK government will trigger the art. 50 of the Lisbon treaty this Wednesday. News released over the weekend showed that the Labour Party will announce its conditions for backing any deal with the EU this Monday, anticipating that they would only support a deal that has the ‘exact same benefits’ as the single market, raising the bar for May's negotiations. Still early to speculate on the outcome, the UK will indeed face a rough couple of years from now on. The pair topped this past week at 1.2530, 10 pips shy of the 23.6% retracement of the January's rally, and the daily chart shows that technical indicators have lost their upward strength, but remain near overbought territory, whilst the price is well above a modestly bullish 20 SMA, indicating that the pair may extend its bearish move, particularly if the mentioned 1.2530/40 region continues to cap the upside. In the 4 hours chart, the price broke below its 20 SMA for the first time since mid March, while technical indicators have turned south, currently around their mid-lines, supporting a downward extension. 1.2425 is the 38.2% retracement of the mentioned rally, and a break below it will likely result in a steeper decline towards 1.2330/50.

Support levels: 1.2425 1.2380 1.2340

Resistance levels: 1.2500 1.2540 1.2585

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 hovers around nine-day EMA above 1.1800

EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.

Gold sticks to gains above $5,000 as China's buying and Fed rate-cut bets drive demand

Gold surges past the $5,000 psychological mark during the Asian session on Monday in reaction to the weekend data, showing that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Federal Reserve expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.