GBP/USD analysis: May cornered in her own trap

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.3079

Odds for a hard Brexit have increased as the EU won't grant May's desired extension.
BOE left monetary policy unchanged, repeated it's prepared to react to whatever Brexit scenario.

The GBP/USD pair collapsed to 1.3003, bouncing from the level some 40 pips ahead of the close, with mounting Brexit tensions overshadowing a BOE meeting. The UK Central Bank maintained its monetary policy unchanged as expected, while the statement was pretty much unchanged from the previous one, remarking that rates could move in either direction in the case of a no-deal Brexit. Regarding this last, the departure date is now the center of attention. According to the latest market talks, the EU could grant the UK an extension up to May 22, not June 30 as PM May pretends, and that only in the case MPs approve a withdrawal agreement next week. The reason behind this short extension is that the UK does not intend to participate in European elections. In this scenario, odds of a hard Brexit increased substantially, as nor May, neither MPs are willing to change their stances.

The pair is short-term bearish according to the 4 hours chart, as it found stability well below a bearish 20 SMA, also below the 200 EMA, this last at around 1.3110. Technical indicators in the mentioned chart have lost their upward strength after reaching oversold levels, now consolidating around these last and by no means suggesting the slump is over. The main support now comes at 1.2960, where the pair bottomed in March and a level that can easily be taken away should Brexit tensions escalate.

Support levels: 1.3000 1.2960 1.2915

Resistance levels: 1.3075 1.3110 1.3150

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 trims gains, hovers around 1.1900 post-US data

EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.

GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.