GBP/USD analysis: stuck to 1.3000 as investors wait for definitions

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2992

European currencies in the green despite risk-off mood.
The EU has a new customs proposal, but it doesn't fit May's ambitions.

A peak of optimism about Brexit sent the GBP/USD pair up to 1.3043 this Tuesday, although, after reading beyond the headline, markets' players realized that there's nothing new under the sun. News indicated that the EU is willing to offer PM May a UK-wide customs union as a way around the Irish backstop issue, but it will have to be negotiated separated to the Withdrawal agreement. PM May, however, wants a UK-wide customs backstop that is legally-binding and included in the divorce bill. The pair was unable to hold on to gains also because safe-havens increased demand following Wall Street's opening, as US indexes collapsed following the lead of its overseas counterparts, fueling the greenback against high-yielding counterparts. The UK macroeconomic calendar will just offer a minor reading this Wednesday, September Mortgages Approvals.

The GBP/USD pair settled below the 1.3000 figure after hitting a fresh weekly low of 1.2936, with the bearish case supported by the unsolved Brexit negotiations. Technical readings in the 4 hours chart support a downward extension, as the price is currently developing below a firmly bearish 20 SMA, which extends its slump below the 200 EMA, as technical indicators remain within negative ground, although with no certain directional strength. The main bearish target for the upcoming sessions continues being 1.2880, the 61.8% retracement of the 2016/18 rally.

Support levels: 1.2955 1.2920 1.2880

Resistance levels: 1.3000 1.3040 1.3085

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.

GBP/USD bounces off lows, back above 1.3200

After bottoming out near 1.3160, GBP/USD manages to regain a bit of shine and reclaim the 1.3200 mark and beyond at the end of the week. Stronger-than-expected UK Retail Sales data seem to be helping the British Pound limit its losses, while the chaotic UK political environment keeps the bulls at bay for now.

EUR/USD looks consolidative around 1.1460

EUR/USD stages a modest rebound after slipping to a three-month low below 1.1420 at the end of the week. That said, the pair now looks to consolidate humble gains just above 1.1460 despite growing uncertainty surrounding the next round of US-Iran negotiations, which keeps the US Dollar’s downside contained.

Gold remains vulnerable, targets $4,100

Gold retreats for the fourth consecutive day on Monday, targeting the key $4,100 mark per troy ounce. The precious metal continues to face headwinds from the Fed's hawkish stance and renewed uncertainty surrounding the US-Iran negotiations.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation

Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."

The Iran war didn't break the US economy, but what happens next?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.