GBP/USD analysis: fresh yearly lows on USD strength

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2845

Brexit-related headlines gave a brief respite to Pound as the EU would be willing to make concessions.
UK preliminary Q2 GDP, fresh industrial production data to seal Pound's destiny Friday.

Headlines indicating that the EU would willing to make concessions to the UK on Brexit deal gave the Pound a boost mid-European morning, although a deeper analysis of the news was sort of disappointing, as chances of the proposed scenario taking place are close to null. The GBP/USD pair surged to 1.2911 in the heat of the release, retreating to settle around 1.2860, from where the pair resumed its decline to fresh yearly lows on broad dollar's strength. According to reports, the EU is willing to allow Britain to remain in the single market for goods, not services or free movement of people, something that chief negotiator Barnier ruled out a couple of months ago. However, that will mean close tights with the EU, something the UK Parliament will hardly approve. The UK is scheduled to provide multiple relevant updates of its economic situation this Friday, with the most relevant one being preliminary Q2 GDP. Estimates point to a 0.4% growth in the three months to June, and by 1.3% YoY. Also out will be Industrial and Manufacturing production figures for June, and the newly included monthly GDP estimated for June. Should the data disappoint and considering the Pound is out of market favor, lower lows for the year should be expected. The downward trend is firmly in place according to intraday technical readings, as in the 4 hours chart, it continues developing below a bearish 20 SMA, while technical indicators resumed their declines, with the Momentum nearing weekly lows and the RSI at 27, with no signs of changing course.

Support levels: 1.2810 1.2770 1.2730

Resistance levels: 1.2875 1.2920 1.2960

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 hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

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 climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

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

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

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.