GBP/USD analysis: no-deal Brexit overshadows everything else

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2706

Upbeat UK Retail Sales weren't able to support the Sterling.
Brexit talks resumed in Brussels, focus on Irish border.

The Pound remains among the weakest currencies of the G-10 group, as despite strong UK data and broad dollar's weakness, the GBP/USD pair barely settled above the 1.2700 level. UK Retail Sales were sharply up in July, backed by online sales and the good weather. Core sales, which exclude volatile energy prices, surged by 0.9% in the month, and by 3.7% from a year earlier, both surpassing expectations and a nice bounce from June's soft figures. Nevertheless, concerns about a no-deal Brexit keep denting Pound's demand. Brexit talks have resumed this Thursday in Brussels with the main issue being on how to prevent a hard border in the Irish Island, although high-profile politicians won't attend the meeting. The short-term picture for the GBP/USD pair is neutral-to-bearish, as it was unable to advance beyond its 20 SMA in the 4 hours chart, while technical indicators keep hovering within negative levels, lacking clear directional strength. The yearly low, achieved this week at 1.2661 is the key support that could be challenged with negative Brexit headlines, opening doors for a continued decline toward the 1.2500 region for the upcoming weeks.

Support levels: 1.2665 1.2620 1.2575

Resistance levels: 1.2735 1.2760 1.2795

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.

AUD/USD sits near a one-month top, above 0.7000 amid fresh USD selling

AUD/USD holds above 0.7000 through the Asian session, trading near a one-month high touched earlier this Monday amid renewed US Dollar selling. US bond yields decline further amid a modest pullback in crude oil prices, capping the USD recovery from a three-week low. Moreover, bets for a November RBA rate hike support the Aussie, though upside seems capped ahead of the crucial two-day FOMC meeting, starting Tuesday.

USD/JPY struggles below 157.00 on weak USD; holds above one-month low ahead of Fed, BoJ meetings

USD/JPY attracts fresh sellers during the Asian session on Monday, stalling its recovery from the lowest level since September 18, touched Friday as a further decline in US bond yields weighs on the US Dollar. Meanwhile, the Japanese Yen benefits from a more hawkish BoJ, further weighing on the currency pair. The downside, however, seems limited as traders keenly await Fed and BoJ policy meetings later this week.

Gold consolidates near $4,000 as recovery remains fragile ahead of Fed decision

Gold (XAU/USD) consolidates modest gains on Monday after last week’s sharp decline pushed the metal to $3,975, its lowest level since August. A pullback in Oil prices offers support as traders react to diplomatic efforts to ease tensions in the Middle East.

Cardano's derivatives and on-chain data confirm bears in control

Cardano extends losses, trading below $0.202 after three consecutive weeks of more than 20% declines since early October. Selling pressure continues to build as weakening derivatives metrics, bearish on-chain signals and a deteriorating technical outlook point to further downside risks. Derivatives data shows a bearish bias for Cardano.

Flight to safety meets a high earnings bar as central bank week begins

Treasuries rallied again, equities are struggling, and central banks and earnings are on the horizon. Last week, US Treasuries rallied for a second consecutive week. This pushed 10s and 30s to 5% and 5.33%, respectively, flattening the curve even as Brent crude rallied about 7% to within striking distance of March peaks at US$119.50, and tech stocks posted a second straight week of losses.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.