GBP/USD analysis: no Brexit progress foreseen until late January

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2627

UK PM May spoke before the Parliament but failed to provide fresh hopes.
Labour leader, Jeremy Corbyn, to put forward a no-confidence motion on May.

The Sterling benefited from a weaker dollar, with the pair rising up to 1.2646, retreating, however, from the level, following PM May speech in the Parliament. Hopes of some clarity regarding Brexit were diluted after May repeated that the current deal is the only deal and that it will probably be submitted to a parliamentary vote in the third week of January. He also reiterated that EU leaders don't want to use the backstop and that they want to reassurance it. Opposition Labour Party's leader, Jeremy Corbyn, has said that he has decided to put forward a motion of no-confidence in PM May following her decision not to hold the Brexit vote immediately. Nevertheless, with the Christmas Holiday around the corner seems unlikely any new development will take place at least until the second week of January, therefore limiting chances of a firmer Pound beyond those resulting from dollar's weakness. The market will be anyway looking to sell the pair at higher levels. The UK has only released the Rightmove House Price Index for December, which increased by 0.7% YoY. There are no data scheduled in the kingdom for this Tuesday.

Now trading at around 1.2630 the GBP/USD pair stays at risk of falling further. In the 4 hours chart, the price is currently struggling with a 20 SMA that lost its early upward strength, while the 200 EMA in the same chart continues gathering downward momentum far above the current level, now at around 1.2780. Technical indicators lack directional strength around their midlines, with the Momentum still developing below the 100 level, indicating absent buying interest. The pair could gain some ground on a break above 1.2686 the high set last Thursday, yet gains beyond 1.2700 seem unlikely as long as Brexit chaos prevails. The bearish potential will increase short-term on a break below 1.2590, the session low and the immediate support.

Support levels: 1.2590 1.2545 1.2510

Resistance levels: 1.2640 1.2685 1.2720

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.