GBP/USD Forecast: 3 potential postponements boost the pound, and technicals look good as well

GBP/USD is ticking higher on reports that Brexit will be postponed.
A delay in the vote in parliament and a delay in the US-Chinese trade talks' deadline have an impact as well.
The technical picture remains positive for the pair.

Yohay Elam FXStreet

GBP/USD is trading close to 1.3100, up on the day. There are various reports on Brexit that help the pair.

1) Potential extension of Article 50

The UK and the EU are considering delaying the UK's exit from the European Union. It is harder for the UK government to deny the rumors. Both sides mull a technical extension of two or three months, allowing the European Parliament to convene in July without UK MEPs, as initially planned.

However, there are also reports of a 21-month extension to 2021. Markets are taking such an extension with a big grain of salt at the moment, but if such a move is confirmed, GBP/USD could surge.

2) Delay in the Brexit vote

PM Theresa May is in Sharm Al-Sheik, Egypt, for an EU-Arab World Summit. On the sidelines of the event, she said that the government needs more time to negotiate and will bring the "meaningful vote" to the House of Commons only on March 12th, 17 days before Brexit Day.

The shorter deadline may push MP's to vote in favor of the deal and markets like it. A vote this week was due to fail.

3) Delay in US-Chinese trade talks

The US and China have made enough progress in trade talks to allow for an extension of the negotiations beyond the March 1st deadline. President Donald Trump will not push for new tariffs on the world's second-largest economy and may meet Xi Jinping, his Chinese counterpart, in late March.

The news pushed stocks higher and the US Dollar lower.

BOE Governor Mark Carney speaks today, but he is unlikely to move the pound too much with Brexit in the limelight. PM May meets Irish PM Leo Varadkar in Egypt, and may also have private talks with other European leaders. Expectations for a breakthrough are low.

GBP/USD Technical Analysis

GBP/USD trades above the 50 and 200 Simple Moving Averages on the four-hour chart and Momentum remains positive. Moreover, the Relative Strength Index is above 50 but below 70, serving as another bullish sign.

Resistance awaits at 1.13110, a high point last week and the highest since late January. 1.3160 is the next cap after holding cable down in late January. 1.3215 was a peak in mid-January and is the next cap.

Support awaits at 1.3045 which was a stepping stone on the way up late last week. 1.3010 was a swing low last week, and 1.2970 is where the 200 SMA meets last week temporary trough.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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 slips back to six-day lows, targets $4,100

Gold retreats for the third consecutive day on Friday, eroding gains seen in the first half of the week and approaching the key $4,100 mark per troy ounce. Indeed, the precious metal continues to face headwinds from the Fed's hawkish stance and renewed uncertainty surrounding the next round of 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.