GBP/USD analysis: Pound bounces on surprise support to May's plan

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3143

UK employment data overshadowed by Brexit woes.
GBP/USD bounced after nearing 1.3100 as Commons voted against amendment NC18 to the trade bill.

The Pound shed over 100 pips against the greenback, undermined by early negative Brexit headlines, as the D-day approaches with no light at the end of the tunnel. UK PM May was expected to be defeated in the House of Commons, as Labours said they would back an amendment from Tories, that would force the UK to join the Union's customs if no trade deal is reached by January 2019. The amendment was rejected at the last minute, resulting in the pair bouncing some 40 pips from its daily low. Also in the wires, Brexit campaigners were formally charged for dodging spending limits and the Vote Leave group was fined £61,000 and referred to the police by the Electoral Commission. Eurosceptic conservatives also won an amendment in which the government is forced to drop the idea of collect tariffs on behalf of the EU unless EU member states agree to do so in reverse. UK employment figures failed to impress, as the ILO unemployment rate remained steady at 4.2% for the three months to May as expected, while wages' growth matched market's expectations. This Wednesday, the UK will release its June inflation data, with the core yearly inflation seen up 2.2% after printing 2.1% a month earlier. The 4 hours chart for the pair shows that, despite the latest bounce, the bearish momentum remains strong ahead of the Asian opening, with technical indicators flipping into the red almost vertically after the price broke with a huge volume candle through its 20 SMA. The decline is set to extend on a break below 1.3100, as the pair bottomed at 1.3102 last week and at 1.3106 this Tuesday, with the pair then probably approaching the key 1.3000 threshold.

Support levels: 1.3100 1.3065 1.3030

Resistance levels: 1.3155 1.3190 1.3240

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.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.